In January 2015, Apache announced the appointment of John J. Christmann IV (left) as chief executive officer and president and John E. Lowe (right) as chairman of the board.
Implementing cost-savings initiatives Throughout 2015, we were laser focused on attacking our cost structure at every level to bring costs into alignment with the current oil price environment. We reduced staffing and consolidated office locations, resulting in a more streamlined and efficient organizational structure. By year-end, we successfully reduced capital spending by more than 60 percent, cash overhead costs by 30 percent and lease operating expenses by 9 percent. Our average drilled and completed well costs in North America were down approximately 35 percent from the fourth quarter of 2014 to the fourth quarter of 2015. Strengthening our financial position During 2015, we paid down approximately $2.5 billion of debt and extended our existing credit facility into 2020. We were one of the few independent oil and gas companies to substantially reduce our net debt position year-over-year without issuing equity or reducing our dividend to extend our drilling program. We have $1.5 billion of cash on hand. Our financial position and flexibility set us apart. Looking Ahead We enter 2016 with a solid foundation capable of weathering a lower-for-even-longer price environment. We will continue to increase shareholder value by focusing on the things we can control. We will protect our asset base, preserve our strong financial position, maintain cash flow neutrality and build high-quality inventory for the future. Our diversified portfolio provides capital allocation flexibility for today, as well as attractive growth options and leverage for future price improvements. By combining low-cost, new-play-generation capabilities with continued testing of new ideas in existing assets, we are building value for the long term. Apache has the financial capacity, the operational capability and the high-quality drilling inventory to enable us to quickly and efficiently respond when prices improve. Regardless of how the industry evolves, we have proven our ability to adapt. For 61 years, we have capitalized on low-commodity-price cycles by maintaining a strong financial position and ample liquidity, exercising cost discipline, seeking operational efficiency, growing our inventory of drilling locations and ensuring we are prepared to take advantage of opportunities as they arise. This year will be no different. We appreciate the efforts of Apacheâ€™s dedicated employees who have helped make 2015 a year of progress and success despite a very challenging macro environment. We also thank you for your continued support.
Throughout 2015, we were laser focused on attacking our cost structure at every level. By the end of 2015, we successfully reduced:
35% North American well costs
30% Cash overhead costs
Lease operating expense John E. Lowe Chairman
APACHE 2015 SUMM A RY A NNUA L REPOR T
John J. Christmann IV Chief Executive Officer and President