Houston’s Noble Energy has joined the list of those firms making deeper spending cuts and lowering salaries of its executives by up to 20% as the COVID-19 pandemic continues gripping the world, reducing travel and demand for travel by air and car.
The company said it’s cutting 2020 capex by another $350 million to a range of $800 million to $900 million, reducing it by 50% from the midpoint of its initial plan.
Noble indicated it found another $125 million in cash cost savings to lower its 2020 cash outlay by more than $175 million compared to its original plan.
The company has lowered the salaries of its executive leadership by 10% to 20% and cut its cash retainer to directors by 25% effective through year-end. It has furloughed employees to align its workforce with activity levels, it said, without offering further details.
Noble also settled for cash certain oil hedges that had reached maximum value and generated $145 million in realized gains in the first quarter, while adding new downside hedges for the rest of the year.
To ensure it has sufficient cash on hand, it had drawn $1 billion of its $4 billion revolving credit facility at end March and reduced its cash dividend to an annualized 8 cents a share. Shares were down 3.6% premarket and have fallen 70% in the year to date, while the S&P 500 SPX, -2.20% has fallen 12%.
Source: MarketWatch