Apache Corporation (NYSE, Nasdaq: APA) said on Thursday that multiple actions are being taken in response to the current oil price environment. The company reduced its 2020 capital investment plan 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, limiting exposure to short-cycle oil projects. 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. John J. Christmann IV, CEO and President of the company has said so far results from the Sapakara West-1 prospect are encouraging.
Apache said its 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.
“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,” said Christmann. “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.”
On January 7 Apache announced that it had made a significant oil discovery at the Maka Central-1 well drilled offshore Suriname on Block 58. The well was drilled using the drillship Noble Sam Croft with Apache as operator holding a 50% working interest and Total holding a 50% working interest.