News wire — Apache Corp on Thursday cut its spending forecast for the year and slashed its quarterly dividend by 90% as oil drillers rush to shore up cash amid a plunge in oil prices.
A host of U.S. shale drillers including Occidental Corp, Devon Corp and Diamondback Energy Inc have announced measures like spending cuts, reduced drilling and lower dividends as oil prices crashed to around $30 per barrel at the start of this week.
Over the next few weeks, Apache will stop all drilling activity in the Permian basin and scale back some of its international operations in Egypt and the North Sea, the company said.
Apache last month announced it had stopped drilling in the Alpine High region of the Permian, hurt by low oil prices and disappointing results from the region, for which it once had high hopes.
Apache’s shares were down nearly 16% in premarket trading as oil prices fell over 5% on U.S. President Donald Trump’s unexpected announcement of restrictions on travel from Europe.
A source told Reuters earlier this week that oil major Chevron Corp could also look to curb its spending by dropping rigs in the Permian basin.
“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,” Apache Chief Executive Officer John Christmann said.
The company will proceed as planned to a third exploration prospect at its highly anticipated Suriname discovery.
Apache now expects its 2020 capital investments between $1 billion and $1.2 billion, down from an earlier forecast of $1.6 billion to $1.9 billion.
Christmann said the company will cut costs further as part of its corporate redesign program, under which it revamped its organizational structure last week to three teams and named new bosses for two of them.
The company cut its quarterly dividend to 2.5 cents per share from 25 cents, helping it save $340 million annually.
Larger U.S.-focused rival Occidental on Tuesday slashed its quarterly dividend by over 86%, as it continues to struggle with the massive debt load it took on to acquire rival Anadarko Petroleum.