Page 14 - NorthAmOil Week 12

NorthAmOil
NEWS IN BRIEF
NorthAmOil
UPSTREAM
Imperial well-positioned to weather market challenges
Over its long history, Imperial has faced numerous periods of low global crude oil prices. In the current challenging market environment caused by the COVID-19 pandemic and commodity price decreases, the company continues to demonstrate its long- standing commitment to financial strength, capital and operating expense discipline and maximising long-term shareholder value.
Imperial is currently in a low capital investment period; however, the company is currently reviewing spending plans
in an effort to identify further efficiency opportunities.
“We are naturally at a lower spending period in the cycle, with the majority of
our capital being focused on maintaining safe, reliable and productive operations,”
said Brad Corson, chairman, president and chief executive officer of Imperial. “We
will continue to closely monitor and have flexibility in our plans to respond to market conditions, and rigorously examine operating costs and capital investments to maximize long term shareholder value in whatever business environment we operate.”
Imperial is taking proactive and preventative measures to protect the health and safety of our workforce and do its part to limit the spread of the novel coronavirus in the community. The company is monitoring
the situation closely and has implemented comprehensive plans across its operations.
“We remain focused on maintaining safe and reliable operations and on the health and wellbeing of our employees and their families, business partners and local communities during this difficult time. We are committed to doing our part to reduce the impact of COVID-19 in our communities,” said Corson.
Imperial, with a Canadian industry-leading debt-to-capital ratio and credit rating, over CAD1.7bn of cash on hand at year-end 2019, low sustaining capital requirements and integration across its value chain, is well- positioned for the challenges presented in the current business environment.
“Imperial’s integrated business model and strong financial position provide resilience. The company is well-positioned to weather periods of market volatility, including reduced demand and low crude oil prices,” said Corson.
IMPERIAL OIL, March 19, 2020
Occidental provides update
on capital spending and
cost reductions
Occidental Petroleum announced today a further reduction in 2020 capital spending to between $2.7bn and $2.9bn from its original 2020 guidance of $5.2-5.4bn, a midpoint reduction of 47%. At current commodity prices, 2020 annual production from continuing operations is expected to be
1,275,000 to 1,305,000 boepd, a reduction of 6% compared to prior guidance of 1,360,000- 1,390,000 boepd.
The company also announced it will reduce 2020 operating and corporate costs by at least $600mn compared to the original 2020 plan, including significant salary reductions for executive leadership. These cost reductions are in addition to previously announced operating and overhead synergies of $1.1bn that are expected to be fully realized in 2020. The combination of synergy realizations
and additional cost reductions is expected to reduce SG&A, other operating expense, and exploration overhead to approximately $500mn on a future quarterly run-rate basis. Operating cost reductions are expected
to lower 2020 domestic operating costs to approximately $7.00 per boe.
“We are making solid progress with additional cost reductions to help withstand the low commodity price environment and other macroeconomic pressures impacting our industry and the global economy,” said President and Chief Executive Officer Vicki Hollub. “Based on our team’s recent efforts, we now expect to significantly lower our costs in all aspects of the business. We will continue to take actions as necessary to further strengthen our balance sheet and ensure the long-term viability of our business.”
OCCIDENTAL PETROLEUM, March 25, 2020
Talos Energy announces
additional budget
reductions and provides
updated 2020 guidance
Talos Energy today announced updated full year 2020 financial guidance, inclusive of $170.0mn of reductions in capital, operating and G&A expenses. The company will continue to evaluate additional opportunities to further reduce 2020 costs. Those reductions would be incremental to the $170.0mn already identified.
Talos continues to expect to generate positive free cash flow in 2020 despite the current commodity environment. We believe that these cost reduction measures, coupled with Talos’ low cash cost structure and
robust hedge book, allow the company to generate free cash flow in 2020, after capital expenditures and interest expense, in the mid- $20’s per barrel average WTI prices for the balance of the year.
The company’s updated guidance for 2020 reflects investments in infrastructure-led, short-cycle projects that were previously
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Week 12 26•March•2020