Top Story | Capital Markets | Capital Expenditure | Capex Decrease | Drilling Program-Rig Count | Capital Expenditure - 2020
Apache Lays Down All Permian Rigs, Lowers Capex 34% in New 2020 Plan
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Apache Corp. announced multiple actions being taken in response to the current oil price environment.
Changes for 2020:
- Cut its 2020 capital plan by 34% to a range of $1.0 billion to $1.2 billion from a previous range of $1.6 billion to $1.9 billion.
- Over the coming weeks, the company will reduce its Permian rig count to zero (the company had 7 rigs running in the play at the start of 2020 and averaged 12 rigs in 2019)
- Activity reductions are also planned in Egypt and the North Sea. In Suriname, upon the conclusion of operations at the Sapakara West-1 exploration well, the company will proceed, as planned, to a third exploration prospect.
Additionally, Apache's board of directors has approved a reduction in the company's quarterly dividend per share from $0.25 to $0.025, effective for all dividends payable after today, March 12, 2020. The company will use the $340 million of cash retained annually from the dividend reduction to further strengthen its financial position. Apache has ample liquidity through its $4 billion undrawn revolver and considerable flexibility to manage the $937 million of bonds maturing between February 2021 and January 2023.
John J. Christmann IV, Apache's chief executive officer and president, said: "We are significantly reducing our planned rig count and well completions for the remainder of the year, and our capital spending plan will remain flexible based on market conditions. We are also further reducing operating and overhead costs as we continue to implement our corporate redesign program, which began in the fall of 2019. These decisive actions will benefit Apache as we navigate these challenging market conditions."
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