According to reports, Apache Corp. plans to reduce its 2015 North American onshore budget by $1.4 billion.
The company has pinned its 2015 budget at $4 billion, which is down compared to its 2014 budget of $5.4 billion.
Reuters reports that even though the company is cutting back, Apache still expects to exceed this year’s budget and end the year at an estimated $6.5 billion in spending. After adjusting for asset sales, Apache also expects a 12 to 15 percent increase in oil and natural gas liquids (NGL) output in North America this coming year.
According to the Houston Chronicle, CEO Steven Farris says that things would be much easier if oil was $100 per barrel, but he remains optimistic about this coming year. The Chronicle also reports that the company’s vice president for investor relations said even with oil at $70 per barrel, Apache’s operations would still be “comfortable.” While a Morningstar analyst stated that some of Apache’s operations would not be profitable if oil drops below $70 per barrel, but the company would be able to manage for a short period of time.
Apache also announced two deals to sell $1.4 billion in assets, which is the latest deal in a string of billion dollar asset sales over the last few years. Investors have pushed Apache to distance itself from its international assets and focus more on its onshore U.S. shale production.