Oil & gas producer Anadarko Petroleum Company (NYSE: APC) announced late Tuesday afternoon that it is cutting its dividend from $0.27 per quarter to $0.05. The dividend is payable on March 23rd to shareholders of record on March 9th.
The company’s dividend yield prior to the announcement was 2.65%. Shares, which had been trading down about 3.7% before the announcement dropped another half point or so immediately after Anadarko released its news.
Company chairman and CEO Al Walker said:
We believe this adjustment to our dividend is the appropriate action to take in the current environment. On an annualized basis, this action provides approximately $450 million of additional cash available to enhance our operations and financial flexibility. Our Board will continue to evaluate the appropriate dividend on a quarterly basis.
Managing cash flow is the new priority in the oil patch. Cuts to capital spending have been sharp and will have to be even deeper if companies are going to bring spending in line with cash flow.
The stock traded down about 5.4% at $37.83 shortly after the announcment in a 52-week range of $28.16 to $95.94.
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