Pacific Rubiales cuts costs for 2015
Pacific Rubiales Energy revised the company’s 2015 capital budget guidance, reducing capital expenditures from US$1.5 billion to a range of US$1.1 to US$1.3 billion, reflecting a WTI oil price assumption range of $55 to $60.
The company predicts a net production of 150 to previous 160 Mboe/d, a slight decrease from the previous guidance, representing approximately 1 to 8% growth over expected 2014 production levels.
Oil price realization is expected to be $1 to $2 above the WTI benchmark price assumption.
The company made a significant reduction in 2015 cash costs, with operating costs estimated at $28/boe, G&A costs of $200 million, financing costs of$250 million and cash taxes of $200 million expected.
Exploration and development capital expenditures have been reduced to $1.1 from $1.3 billion, the majority directed to development drilling and facilities, and a small amount to exploration, stands in the company’s statement.
Ronald Pantin, Chief Executive Officer of the company said, “The uncertainty in oil prices continues and although we believe that oil prices will recover, we are taking a cautious view on the timing, reducing both our costs and our 2015 capital budget to match expected cash flow. Our reduced capital budget only has a marginal impact on production targets as we focus expenditures on our highest return and most material near-term projects.”
According to Pantin, Pacific Rubiales enters 2015 in solid standing. The company reduced its capital expenditures to match expected cash flow in a lower oil price environment and have the flexibility and further discretionary components to adjust to the external environment.
Press Release; Image: BV