Noble Resources Inc. reported on Wednesday a series of actions to counter the impact of declining oil prices and sluggish demand caused by a global pandemic.
The Houston-headquartered independent oil and natural gas exploration and production company disclosed that it is slashing its capital expenditures (Capex) for the year by an extra $350 million to a range of $800 million to $900 million, reducing it by around 50 percent from the mid point of the company's initial strategic plan.
One month after slashing investment by nearly one-third, Noble Energy has joined a rising community of counterparts in trimming expenditures, with the impact mainly on U.S. onshore companies, while furloughing workers and lowering wages in reaction to the pandemic's never-ending damage and rapid downturn in oil and gas demand.
The organization is poised to raise another $125 million in financial cost savings to slash cash outlay by over $175 million relative to its original goal for the year. Noble Energy has reduced its executive management's wages by 10 percent to 20 percent and essentially slashed its cash retainer to directors by 25 percent over the year end.
The company has settled for cash some oil hedges that had reached full value and produced $145 million in realized profits in the first three months of the year, while adding new downside hedges for the remainder of 2020.
It had drawn $1 billion of its $4 billion revolving credit facility at the end of March to ensure it has ample capital on hand and cut its cash dividend to an annualized 8 cents a share. Shares have dropped by 3.6 percent during pre-market sessions and by 70 percent for the year, while the S&P 500 has retreated by 12 percent.
The company said it will operate one rig in the DJ Basin for the remainder of the year. According to chief executive David Stover, they are working rapidly and effectively to address the current economic challenges facing the US energy giant, with a strong emphasis on the financial resources of the company and to position it to boost shareholder value.
Also starting on May 1, Stover's salary will be slashed by 20 percent, with senior officers also taking a 15 percent cut and vice president paychecks trimmed by 10 percent. Furthermore, board members will take 25 percent less in cash retainers.
Established more than 85 years ago, Noble Energy operates a top-caliber portfolio of assets onshore in the United States and offshore in the Eastern Mediterranean and off Africa's western coast.
