Anadarko Slashes Dividend By 81% -- 2nd Update

By Maria Armental 

Anadarko Petroleum Corp. slashed its quarterly dividend by 81% to five cents, the latest company to cut payouts to stockholders amid an oil rut.

The move will save the company about $450 million a year, Anadarko Chief Executive Al Walker said.

The company's stock, down more than half over the past 12 months, was up 0.48% in after hours trading Tuesday to $37.42.

Light, sweet crude for March delivery settled down $1.75 on Tuesday, or 5.9%, at $27.94 a barrel on the New York Mercantile Exchange. Meanwhile, Brent, the global benchmark, fell $2.56, or 7.8%, to $30.32 a barrel on ICE Futures Europe.

While executives at some major oil companies including Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC have vowed to take on new debt to continue the payouts, dividends are increasingly becoming a target as companies seek to drive down costs and shield debt ratings.

Last week, ConocoPhillips chopped its dividend from 74 cents to 25 cents, saying the 66% reduction was necessary to protect the company's financial health as oil prices hovered near 12-year lows. The Houston company booked $2.7 billion in charges in the fourth quarter that pushed it to a $3.45 billion loss.

In December, Kinder Morgan Inc. slashed its dividend by 75% to 12.5 cents a share, seen at the time as an unprecedented move for a company that had held dividends as sacrosanct.

Last week, a day after Anadarko reported a wider fourth-quarter loss on a 35% drop in revenue, Standard & Poor's Ratings Services changed its outlook on Anadarko's ratings to negative, indicating a possible downgrade.

Anadarko's first reduced dividend will be made on March 23 to stockholders of record at the close of business on March 9.

The Woodlands, Texas, company, one of the largest independent oil and gas producers in the U.S., had raised its dividend to 27 cents in 2014, just before oil prices began their downward spiral.

Timothy Puko contributed to this article.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

February 09, 2016 18:40 ET (23:40 GMT)

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