Houston-based Apache Corp. continued to dial back activity dramatically during the first quarter in North America’s onshore, with the rig count falling from 65 since the end of 2014 to 15 on March 31, down 77%.

“We’re highly focused on reducing all elements of the cost structure,” CEO John Christmann IV said during a conference call Thursday. That means running a “minimal rig count,” to adjust costs. Pro forma for asset sales in the U.S. onshore since a year ago should keep production flat from 2014 levels.

“We expect to capture more cost savings through the year,” Christmann said.

Like its large cap peers, low commodity prices pummeled quarterly results, which moved into the red with net losses totaling $4.7 billion (minus $12.34/share). The loss mirrored the ceiling test writedown in the quarter, which was also $4.7 billion, nearly the same as a $4.8 billion writedown in 4Q2014 (see Shale Daily, Feb. 12). In 1Q2014 Apache earned $236 million (60 cents/share).

The one-time impairments in 1Q2015 included a $5.2 billion write-off of U.S. assets, $1.4 billion for Canada and $600 million for North Sea assets. Meanwhile, revenue fell by half from a year ago to $1.82 billion, a direct reflection of reduced activity and low prices, Christmann said.

Because operators are tied to a ceiling test for a 12-month trailing price for oil and natural gas under U.S. Securities and Exchange Commission regulations, if oil prices don’t strengthen, more writedowns are expected through this year, CFO Steve Riney told analysts.

If prices were to strengthen, Apache would focus on completions, not drilling, Christmann said. Apache is using a $50/bbl West Texas Intermediate oil price for planning purposes, and even though prices are “more encouraging,” that’s not a signal to step on the gas.

“I’m more concerned about cash flow” than production, he said.

About 60% of the North American capital flows into the Permian Basin, where Apache ran an average of 15 rigs in the first three months, down from 42 in the fourth quarter. The rig count now stands at 11.

The Central region, which includes the Anadarko Basin and the emerging Canyon Lime, averaged four rigs in the quarter; it’s now down to three. The Eagle Ford has no rigs in operation. In Canada, the Montney region averaged four rigs until the end of March, when all of the rigs were dropped ahead of breakup season.

Efficiencies in drilling and better deals with vendors should reduce drilling and completion costs this year by 20-40% from 2014 levels, as Apache had forecast last November (see Shale Daily, Nov. 20, 2014).

Apache has been under pressure from shareholders over the last couple of years to reposition its portfolio by selling off international operations to focus more in North America. When adjusted for asset sales from a year ago, pro forma onshore North America “now represents nearly two-thirds of total company production,” Christmann said.

Between January and March, more capital expenditures were devoted to North America than anywhere else. Of the total $1.24 billion budget in the first quarter, $787 million was directed to North American onshore projects, with $62 million set aside for the Gulf of Mexico.

Capital expenditures are coming down as assets, primarily overseas, are sold off. Management expected the 2015 capital program to be front-end loaded, with guidance for North America remaining at $2.1-2.3 billion.

“We will monitor oil prices for the remainder of the quarter, and at mid-year, revisit our planned activity levels for the balance of 2015,” Christmann said. “Apache…will respond quickly to changes in our cash flow. ” Management also “will look to be opportunistic but highly disciplined in evaluating new opportunities to grow or enhance our existing portfolio and create shareholder value.”

Production during the first quarter was 62% liquids and 38% natural gas. In North America’s onshore, Apache received an average oil price of $44.07/bbl in the quarter, versus $93.72 in the year-ago period. Onshore gas prices averaged $2.60/Mcf, compared with $4.82. Worldwide gas prices averaged $3.14, down from $4.46 a year earlier.