Apache’s 2015 capital budget less than half of last year’s $8.5 billion

Apache Corp., Houston, plans a capital budget of $3.6-4 billion in 2015, with $2.1-2.3 billion directed toward onshore North America and $1.5-1.7 billion for international and offshore.

The new budget is down significantly from last year’s $8.5 billion. The company lost $5.4 billion on the year, compared with earnings of $2.2 billion in 2013. In the fourth quarter, the company reported a net loss of $4.8 billion, compared with earnings of $174 million in fourth-quarter 2013.

After reducing its rig count from an average of 91 in last year’s third quarter to an estimated 27 by the end of February, Apache plans to run an average of 17 rigs onshore North America in 2015.

The company is also reducing its frac crews by 50% during the same time period and delaying some well completions until service costs decrease materially.

“In 2015, Apache will run a streamlined capital program that focuses on efficiency improvements, downspacing, and other strategic tests to further delineate our extensive inventory of locations within the Permian, Eagle Ford, Canyon Lime, Duvernay, and Montney,” said John J. Christmann IV, Apache’s chief executive officer and president.

Onshore North American production for the year is projected to be relatively flat from last year’s average of 302,000 boe/d, as adjusted for 2014 asset sales. Production internationally and offshore will be up slightly from last year’s average of 207,000 boe/d, as adjusted for 2014 and announced 2015 asset sales.

“We have planned our budget and operations in such a way that we can dynamically manage our activity levels and capital spending to respond quickly to material changes in commodity prices,” explained Christmann.

“Should we see a meaningful rebound in oil prices from current strip levels or a notable shift in our cost structure, we have the organizational capability to add rigs and production quickly and efficiently from our ready inventory of highly economic projects in North America,” he said.