AMSTERDAM, March 16, 2020 /PRNewswire/ -- Core Laboratories N.V. (NYSE: "CLB US" and Euronext Amsterdam: "CLB NA") ("Core", "Core Lab", or the "Company") is announcing immediate actions in response to current market volatility, operational disruption related to COVID-19, and the oil and gas industry outlook. In addition, Core Lab is making further corporate and operating cost reductions and reducing its 2020 capital expenditure program to align with the Company's client activity. The Company also feels it is appropriate to withdraw its first quarter 2020 guidance, last provided on January 29, 2020.
In response to these market circumstances, Core's Board of Supervisory Directors has approved a plan to reduce the Company's future quarterly dividends to $0.01 per share beginning with the second quarter of 2020, and to focus excess free cash flow on debt reduction. The Company is actively enacting cost control plans which include: 1) corporate and operating cost reductions, 2) annual capital expenditures reduced to below the 2016 level of $11.4 million, and 3) eliminating all non-essential costs. Combined, these actions will provide additional cash flow to accelerate debt reduction.
Based upon a quarterly dividend of $0.01 per share and the number of shares currently outstanding, the annual dividend distribution will decrease by approximately $43 million, providing additional flexibility in the Company's capital allocation policy. Cost reduction plans already approved and reduced capital expenditures are estimated to provide additional cash flow of more than $30 million on an annual basis. Core believes it will have ample liquidity through its revolving credit facility to manage debt and maintain a strong balance sheet.
Core Lab believes these immediate actions, as well as continued evaluation and adjustments, will allow Core Lab, as it has for over 83 years, to navigate through these challenging times. Core Lab's dedicated and talented workforce will continue to deliver outstanding results to our worldwide client base. Core remains focused on preserving the quality of service for its clients and producing returns for its shareholders.