Noble Energy cuts salaries, reduces 2020 capex and taps revolver during pandemic, falling oil price

Noble Energy Inc.
announced a series of measures Wednesday to combat the effect of a falling oil price and weak demand during the coronavirus pandemic. The Houston-based indepdendent oil and natural gas exploration and production company said it’s cutting 2020 capex by an additional $350 million to a range of $800 million to $900 million, cutting it by 50% from the midpoint of its initial plan. The company has identified another $125 million in cash cost savings to reduce cash outlay for 2020 by more than $175 million versus the 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. The company has 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
has fallen 12%.

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