Baker Hughes announced a financial update in response to the significant decline in oil and gas prices and the COVID-19 pandemic.
The oil and gas service company said that in addition to taking critical steps to reduce the spread and infection of the virus as well as mitigate the impact of this pandemic to its business operations, the company was taking a number of actions in response to the current market environment.
Baker Hughes approved a plan to reduce 2020 net capital expenditures by over 20 per cent versus 2019 net capital expenditures.
The firm also approved a plan that will result in restructuring, impairment, and other charges of US$1.8 billion, of which approximately $1.5 billion will be recorded in the first quarter of 2020. Future cash expenditures associated with these charges are estimated to be approximately $0.5 billion with an expected payback within 1 year.
In a statement, Baker Hughes noted that it continues to maintain solid financial strength and liquidity. Cash and cash equivalents totalled $3 billion for the year ended December 31, 2019, excluding assets held on behalf of GE.