Anadarko, a U.S.-based independent oil and gas exploration and production company has cut its capital expenditures plan for 2016. More precisely, the company plans to reduce year-over-year capital investments by almost 50 percent.

The most cuts will come at the company’s onshore activities in the U.S., where Anadarko expects to slash capital investments by $2.5 billion year over year.

The company is reducing its U.S. onshore rig count by 80 percent to five operated rigs, from an average of 25 in 2015, while focusing on its base production and retaining the flexibility to leverage its inventory of approximately 230 drilled but intentionally uncompleted wells.

In the Delaware Basin, Anadarko plans to run four operated rigs, which will be directed toward delineation and lease maintenance rather than development activities. To date, the company’s successful activities in this play have reduced well costs, identified additional prospective zones and doubled the estimated recoverable resources to more than 2 billion BOE. In the DJ Basin, the company expects to operate one rig, compared to seven in 2015, the company said.

“In 2016, we will continue our disciplined and focused approach, preserving and building value by leveraging our best-in-class capital allocation, enhancing operational efficiencies and continuing an active monetization program,” said Al Walker, Anadarko Chairman, President and CEO. “We are committed to again investing well within cash inflows from a combination of anticipated discretionary cash flow and our ongoing monetizations, with the expectation of also reducing net debt during the year.

He continued: “As we announced last week, we have already closed or announced monetizations totaling approximately $1.3 billion, and we expect our cash position to be further strengthened during the year through substantial cost reductions and additional identified monetization opportunities. We will also benefit from the recent action by our Board to reduce our dividend, which will provide approximately $450 million of additional cash this year.”

In the U.S. Gulf of Mexico the company’s capital-efficient tieback oil opportunities, as well as on advancing appraisal activities. By leveraging its existing infrastructure, Anadarko’s tieback opportunities offer returns of more than 30 percent at today’s strip prices. These activities will include tiebacks at Lucius, Caesar/Tonga and K2. In addition, Anadarko plans to advance existing discoveries through appraisal activities at Shenandoah and Phobos. One exploration well is planned at the Warrior prospect, which if successful, could be a tieback to K2.

In the international waters, Anadarko will in 2016, advance its Paon oil discovery offshore Côte d’Ivoire toward potential development with one appraisal well, a drillstem test, and two exploration wells. Once activities are completed in Côte d’Ivoire, the rig is scheduled to return to Colombia to conduct additional exploration drilling activities. Offshore Ghana, the company expects to achieve first oil at the TEN complex in the third quarter of 2016.

In Mozambique, Anadarko expects minimal funding in 2016 as it works three parallel paths toward a Final Investment Decision (FID) for its LNG project. These processes include securing the necessary legal and contractual framework, progressing more than 8 million tonnes per annum of off-take toward long-term sales contracts and advancing project financing, the company said.

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