Apache Corporation Comments on Financial Position and Liquidity
March 27 2020 - 7:00AM
Apache Corporation (NYSE, Nasdaq: APA) today provided additional
information related to the strength of its liquidity position and
capital structure in response to Standard and Poor’s decision
yesterday to lower Apache’s credit rating.
On March 26, 2020, Standard & Poor’s reduced Apache’s credit
rating from BBB to BB+. The primary impact of the ratings change is
that Apache will post letters of credit aggregating approximately
$650 million related to asset retirement obligations in the U.K.
North Sea. While credit ratings serve a valuable purpose and are
important to Apache, the company does not expect this ratings
change will have any other material impact on its financial
position, liquidity or business strategy.
“Apache has ample liquidity and a very manageable bond maturity
profile for the next five years. We have taken aggressive actions
to protect our balance sheet and cash flows: decreased planned 2020
upstream capital investment by approximately $1.3 billion, or 54%
year over year, reduced our annual dividend by $340 million, and
targeted more than $150 million of annualized cost structure
reductions through organizational changes we began in late 2019. In
addition, we recently added significant near-term oil price hedges
to protect 2020 cash flows from further price deterioration,” said
Stephen J. Riney, Apache’s chief financial officer. “Together,
these actions put us closer to a path for cash flow neutrality in
the current price environment.”
Apache has a $4.0 billion credit facility, which is
contractually committed through March 2024. The facility has
commitments from 18 banks, 17 of which are rated A or better, is
not subject to borrowing base redeterminations, has no covenants
that are triggered by ratings agency actions, and includes a $2
billion committed sublimit for letters of credit, which will easily
accommodate the North Sea asset retirement obligation postings.
Apache has posted a presentation at
investor.apachecorp.com/events-and-presentations with a review of
its recent strategic actions related to the current market
environment, including near-term hedges to protect cash flow from
oil price dislocations, its liquidity position and debt maturity
profile, and implications of S&P’s ratings action.
About Apache
Apache Corporation is an oil and gas exploration and production
company with operations in the United States, Egypt and the United
Kingdom and exploration activities offshore Suriname. Apache posts
announcements, operational updates, investor information and all
press releases on its website, www.apachecorp.com.
Forward-looking statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements can be identified by words such as “anticipates,”
“intends,” “plans,” “seeks,” “believes,” “continues,” “could,”
“estimates,” “expects,” “guidance,” “may,” “might,” “outlook,”
“possibly,” “potential,” “projects,” “should,” “will,” “would,” and
similar references to future periods, but the absence of these
words does not mean that a statement is not forward-looking. These
statements include, but are not limited to, statements about future
plans, expectations and objectives for Apache’s operations,
including statements about our capital plans, drilling plans,
production expectations, asset sales, and monetizations. While
forward-looking statements are based on assumptions and analyses
made by us that we believe to be reasonable under the
circumstances, whether actual results and developments will meet
our expectations and predictions depend on a number of risks and
uncertainties which could cause our actual results, performance,
and financial condition to differ materially from our expectations.
See "Risk Factors" in our 2019 Form 10-K and in our quarterly
reports on Form 10-Q filed with the Securities and Exchange
Commission ("SEC") for a discussion of risk factors that affect our
business. Any forward-looking statement made by Apache in this news
release speaks only as of the date on which it is made. Factors or
events that could cause our actual results to differ may emerge
from time to time, and it is not possible for us to predict all of
them. Apache undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future development or otherwise, except as may be required by
law.
Contacts |
Investor: |
(281)
302-2286 |
Gary
Clark |
Media: |
(713) 296-7276 |
Phil West |
Website: |
www.apachecorp.com |
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