U.S. oil producer Apache Corp. reported a first-quarter loss on impairment charges to some of its older wells in the Permian Basin, the top U.S. oil field, on May 6, as a historic price crash sinks the value of oil properties.
Shale oil producers in North America are grappling with the worst oil price shock in decades, which has led several companies, including Apache, to cut spending for the year and slash dividends.
Apache reported a quarterly loss of $4.5 billion, or $11.86 per share, compared with a loss of $47 million, or 12 cents per share, for the same period last year. It had an adjusted loss of 13 cents per share, beating Wall Street expectations of a loss of 33 cents per share.
The company has evaluated its wells and is taking a "targeted approach" to shut-ins and curtailing output, CEO John Christmann said. "While the 2020 outlook for the global economy and the oil and gas industry, specifically, is uncertain, we have made great strides in this environment to reduce our cost structure," he said.
The company said it has just one drilling rig in the Permian Basin now, down from 21 at the start of the year, and it is finishing its last well. Apache does not plan to drill or frack any more U.S. wells this year and is also reducing activity in Egypt and the North Sea.
In March it cut its spending plans for the year and slashed its dividend by 90%.
The company's shares ended down 1.4% to $11.61 on May 6, but rose 1.6% after the bell. Shares are down by more than half so far this year.
The company will hold a call with analysts on May 7.
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