Apache cuts rig count by 70pc, posts $4.8bn loss

OREANDA-NEWS. Apache will cut its rig count by 70pc from 91 to 27 rigs by the end of this month amid low oil and gas prices, and posted a fourth-quarter loss of \$4.8bn.

The company has reduced hydraulic fracturing crews by 50pc and is delaying some well completions until service costs fall. Apache previously cut its 2015 North America onshore spending plans by 25pc to about \$4bn, reflecting the impact of low oil prices on US independents. Apache took \$5.2bn in write-downs in the fourth quarter, including a \$2bn reduction in the carrying value of oil and gas properties.

"We believe it more prudent to curtail our activity until costs are lower and prices recover," said chief executive John Christmann.

North American onshore production is now expected to be flat year-over-year on a capital budget of \$2.1bn-2.3bn, with onshore oil production expected to increase by 1-3pc.

Gulf coast production averaged 32,800 b/d of oil equivalent (boe), up 8pc on the year, largely comprised of Eagle Ford output. Apache plans to operate one to two rigs in the Eagle Ford this year. Permian production averaged 168,700 boe/d, up 26pc on the year. Apache is cutting from 42 rigs in the fourth quarter to 10-12 rigs in the Permian basin this year.

In North America onshore, Apache received an average oil price of \$68.21/bl during the fourth quarter, down by 26pc in the prior-year period. North American onshore natural gas prices averaged \$3.79/mn ft?, higher by 7pc on the year.

North Sea production averaged 80,800 boe/d, up 7pc compared with the prior-year period and the highest quarterly production rate achieved by Apache since it began operating in the region in 2003.

Egypt production averaged 344,100 boe/d, down 4pc from one year ago.

The company expects to net \$3.7bn from its sales of the Kitimat and Wheatstone LNG facilities. Fourth quarter worldwide production averaged 673,0000 boe/d. Onshore North American production averaged 367,800 boe/d.