Globe Newswire 27-Mar-2020 7:00 AM
HOUSTON, March 27, 2020 (GLOBE NEWSWIRE) -- 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.
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.
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.
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