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Apache Corp became the latest oil major to report a negative net result for the first quarter, booking a loss of $4.5 billion, or $11.86 per share for the period.
Like its peers, Apache also slashed its capital expenditure by 55 percent compared with 2019 to some $1.1 billion and cut its dividend by 90 percent. The company said it would use the cash saved from dividends to strengthen its financial position.
Apache has reduced the number of its drilling rigs in the Permian from 21 at the start of the year to just one and plans to halt all drilling and fracking operations after it completes one last well for the year. The approach is likely to become more widespread in the shale patch, where oil prices have hit producers particularly hard.
Last month, Apache said it had managed to cut annualized costs by more than $300 million, compared with an earlier target of $150 million in cost savings. This year alone, the company said, it will save some $225 million.
“We have made substantial progress on our organizational redesign initiative, which began in the fall of 2019. This is enabling more flexible resource allocation and increased collaboration while delivering cost savings that are critical in the current environment,” chief executive John Christmann said at the time.
Apache is one of the biggest players in the Permian, with average daily production of 96,919 barrels over the first quarter. This was down from 103,275 bpd at the end of 2019. Its international output—in Egypt and the North Sea—also declined during the first quarter, with the total, including U.S. and international production, down by more than 7,000 bpd during the reporting period.
As production shrinks, however, Apache last month announced a second significant oil discovery in a block that it explores in partnership with French Total in Suriname. Drilling operations there will continue, the company said.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.