March 23, 2020 / 7:38 AM / 8 days ago

BRIEF-Aker BP Cuts Exploration Spending By 20% In 2020, Further Reductions Planned

March 23 (Reuters) - Aker BP ASA:

* AKER BP UPDATES ITS INVESTMENT PROGRAM

* ON CORONAVIRUS: IS UPDATING ITS INVESTMENT PROGRAM AND FINANCIAL FRAMEWORK IN ORDER TO SECURE ADDITIONAL FINANCIAL OPTIONALITY IN RESPONSE TO HIGH UNCERTAINTY CAUSED BY COVID-19 CRISIS

* NON-SANCTIONED FIELD DEVELOPMENT PROJECTS ARE PUT ON HOLD

* EXPLORATION SPENDING IS REDUCED BY 20 PERCENT IN 2020, WITH FURTHER SIGNIFICANT REDUCTIONS PLANNED FOR 2021-22

* PRODUCTION COSTS ARE REDUCED TO USD 7-8/BOE, DOWN AROUND 20 PERCENT FROM PREVIOUS GUIDANCE, AS ALL NON-CRITICAL ACTIVITIES ARE BEING POSTPONED AND WEAKER NOK FAVOURABLY IMPACTS COST LEVEL

* PRODUCTION GUIDANCE FOR 2020 REMAINS UNCHANGED AT 205-220 MBOEPD

* WE HAVE FINANCIAL RESOURCES TO PURSUE VALUE ACCRETIVE GROWTH OPPORTUNITIES AHEAD-CEO

* FOR 2020, NON-SANCTIONED FIELD DEVELOPMENT PROJECTS ON HOLD REPRESENTS A CAPEX REDUCTION OF 20 PERCENT COMPARED TO PREVIOUS GUIDANCE

* RECENT WEAKENING OF NOK VERSUS USD CONTRIBUTES TO LOWERING COMPANY’S COST BASE MEASURED IN USD.

* JOHAN SVERDRUP PHASE II, ÆRFUGL PHASE I AND COMPLETION OF VALHALL FLANK WEST PROJECTS WILL CONTINUE AS PLANNED

* FOR 2021-22, COMPANY EXPECTS CAPEX TO DROP WELL BELOW USD 1 BILLION

* COMPANY NOW FORECASTS EXPLORATION SPEND OF APPROXIMATELY USD 400 MILLION FOR THE YEAR

* CO’S INVENTORY OF OIL PUT OPTIONS COVERS ABOUT 60% OF NET AFTER TAX VALUE OF EXPECTED OIL PRODUCTION FOR H1 2020 AT AVERAGE STRIKE PRICE OF ABOUT USD 54 PER BARREL

* AMBITION OF RETURNING COMPANY’S VALUE CREATION TO SHAREHOLDERS THROUGH CASH DIVIDENDS REMAINS FIRM

* BOARD WILL MAKE HOLISTIC ASSESSMENT OF ALL RELEVANT FACTORS, INCLUDING OIL PRICES, RISKS ENHANCED BY COVID-19, AND IMPACT ON CO’S BALANCE SHEET AND LIQUIDITY POSITION Source text for Eikon: Further company coverage: (Gdansk Newsroom)

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