The sharp decline in oil prices amid the emerging price war between OPEC and Russia has prompted oil and gas producers to take drastic measures to protect their balance sheets. As companies race to decrease spending and maintain positive free cash flow, S&P Global Ratings said March 9 that it plans to review all investment-grade oil and gas producers, as well as oilfield services providers, and warned of potentially "severe" rating actions.
S&P Global Market Intelligence is tracking shale companies' responses to the plunging oil prices, listed in reverse chronological order. This feature will be updated with new information as more companies announce their plans.
DCP Midstream reduces workforce by 15%, cuts senior executive team salary
DCP Midstream LP on April 13 said it is laying off 15% of its workforce in another response to volatile market conditions due to the novel coronavirus pandemic, after cutting its distribution payout and capital spending.
In addition, the energy midstream partnership's senior executive team will reduce their base salary and variable compensation by between 10% and 15%, according to a news release.
The job cuts and salary reductions, along with other internal cost savings, are expected to generate $40 million of incremental retained cash flow.
Baker Hughes to slash 2020 capex by over 20%, to book $16.5B of charges in Q1
Baker Hughes Co. on April 13 said it approved a plan to slash its 2020 net capital expenditures by more than 20% compared to the 2019 capex level, as a response to a weak market environment driven by low oil and gas prices and the novel coronavirus pandemic. The oilfield service provider also anticipates a noncash goodwill impairment charge of about $15 billion during the first quarter of the year.
The charges are related to a decline in the company's market capitalization in the first quarter due to the oil price collapse and drop in demand, as well as the effects of the current market conditions on its primary customers' investment and operating plans. Baker Hughes concluded that the carrying value of its oilfield services and oilfield equipment reporting units went over the estimated fair value, resulting in the impairment charge.
Kosmos to further cut spending, delays timeline of African floating LNG project
Kosmos Energy Ltd. identified another $75 million in cost reductions in its capital and operating expenditures, resulting in a target spending plan of $200 million to $225 million for 2020.
The additional cost reductions will bring total cost savings identified since mid-March to about $235 million, according to an April 8 news release. The company expects savings to come from across its portfolio and include the earlier stoppage of drilling activity and the removal of noncritical work.
The company is delaying phase 1 of its Greater Tortue Ahmeyim LNG project, located on the maritime border of Mauritania and Senegal, by about 12 months as restrictions to prevent the spread of the coronavirus across the globe affect project activities. Phase 1 of the project is over 30% complete, but first gas is now expected in the first half of 2023, from the previous schedule of the first half of 2022.
Marathon Oil again slashes capital budget, aims to spend $1.3B in 2020
Marathon Oil Corp. for the second time slashed its 2020 capital budget, to $1.3 billion or less, representing a total budget decrease of $1.1 billion from its original 2020 capital spending guidance of $2.4 billion.
Marathon Oil's 2020 capital spending is now anticipated to be about 50% lower than actual spending in 2019, according to an April 8 news release.
Marathon Oil said the revised $1.3 billion capital budget includes the execution of second-quarter frack holidays in the Bakken and Eagle Ford shale regions. After the frack holidays, the corporation will transition to a lower drilling and completion program over the second half of the year in both basins.
HollyFrontier trims total capex by 15%, to defer nonessential projects
In response to the novel coronavirus pandemic and its negative impacts on the economy, HollyFrontier Corp. is trimming its total consolidated capital expenditures by about 15% to a range of $525 million to $625 million, from the previous guidance range of $623 million to $729 million.
HollyFrontier said it is also assessing projects at its refinery and limiting or deferring nonessential projects and contractor work after restricting facilities staff to essential personnel only, according to an April 8 news release.
Exxon Mobil slashes $10B from 2020 capital spending plan
Oil and gas supermajor Exxon Mobil Corp. cut its capital budget for 2020 by 30%, or $10 billion, in response to low energy prices caused by collapsing demand. Exxon said it would also cut its cash operating expenses by 15% to survive the downturn.
Exxon's new capital investment budget for the year is now about $23 billion, a decrease from the $33 billion previously announced, according to an April 7 news release.
The company said it plans to increase efficiency and reduce costs to lower cash operating expenses. The bulk of Exxon's planned spending cut will be in the Permian Basin, which will have an impact on the pace of drilling and well completions but not on resource recovery and value in the production area, the company said. Exxon is one of the last big oil and gas companies to announce spending cuts after the coronavirus spread gutted transportation fuel demand and Saudi Arabia and Russia started a price war. Eleven other of the biggest oil and gas companies cut nearly $34 billion from their plans.
Plains slashes 2020-2021 capital program by $750M, cuts distribution by 50%
In response to the crash in energy prices and uncertain market conditions, Plains All American Pipeline LP slashed its 2020 and 2021 capital program by $750 million to $1.55 billion, representing a 33% drop from the partnership's previously targeted capital program of $2.3 billion.
Including the elimination of Plains' financing for the deferred Red Oak crude oil pipeline project, the partnership said the total capital reduction is $1.35 billion, or a 47% cut. The rest of the spending cuts will come from cancellations, cost savings and scope adjustments to other capital projects, Plains said in an April 7 news release. Plains also cut its first-quarter distribution by 50% compared to distributions paid in February, to 18 cents per common unit.
Sandridge Energy to cut 2020 capital expenditures, expenses and cost structure
SandRidge Energy Inc. on April 7 said it will further cut its 2020 capital expenditures, with spending to be focused on safety and mechanical integrity and quick payback, among others. The company will defer drilling and completion activity until market conditions improve.
Sandridge is planning to reduce its general and administrative expenses and operating cost structure through salary and additional personnel reductions, according to a news release. The company is also considering the potential sale of non-cash flowing assets.
Continental Resources suspends dividend, reduces production for April, May
Continental Resources Inc. decided to suspend its quarterly dividend as part of the oil and gas producer's plan to manage its cash flow amid a weak market pummeled by low oil prices and the novel coronavirus pandemic. The company also said it is reducing its production for April and May after estimating that the global crude oil and product demand have been impacted by 30% due to the coronavirus pandemic, according to an April 7 news release.
Ovintiv again trims Q2 investments by $200M, restructures crude oil hedges
Ovintiv Inc. decided to cut its second-quarter investments by an additional $200 million, raising the company's total capital reductions in the second quarter to $500 million.
Ovintiv also restructured its oil hedges for additional protection against falling oil prices. Ovintiv projected that a balance-of-year $20 NYMEX West Texas Intermediate price would result in oil hedge revenues of more than $1.1 billion, excluding oil hedge settlements during the first quarter.
Parex Resources suspends 2020 drilling programs, reduces oil production
Parex Resources Inc. suspended all of its remaining 2020 drilling programs in response to the oil price crash and coronavirus pandemic.
The Calgary, Alberta-based company estimated its total full-year 2020 capital to be $100 million to $110 million, with about $75 million to $80 million spent in the first quarter, according to an April 2 news release. The remaining $25 million to $30 million will be for the balance of 2020, given that oil prices remain at current levels.
Parex Resources has already begun to reduce oil production on its legacy fields to minimize social interactions amid the coronavirus pandemic. The company anticipates its April production to be 45,000 barrels of oil equivalent per day to 50,000 boe/d. In addition, the company's executive leadership will take a 10% salary reduction, effective April 1 and for the rest of the year.
Cenovus Energy cuts 2020 capex again, suspends quarterly dividend
Given the continuing downward trajectory of oil prices, Cenovus Energy Inc. decided to further cut its 2020 capital spending by an additional C$150 million, raising the total reduction to C$600 million from the December 2019 guidance of C$1.3 billion to C$1.5 billion.
Cenovus' new capital expenditure guidance is now in the range of C$750 million to C$850 million, representing a 43% drop from its initial December 2019 budget, according to an April 2 news release. Cenovus is anticipating operating cost reductions of approximately C$100 million, as well as general and administrative cost reductions of C$50 million, both compared with the previous budget from December 2019.
Enable Midstream slashes 2020 capex by $115M, reduces distribution by half
Enable Midstream Partners on April 1 said it is slashing its 2020 total expansion capital expenditures by $115 million, or 48%, from the top end of its previous guidance range, as a response to the current market conditions.
The partnership also forecasts a $20 million decrease from the midpoint of its previous 2020 maintenance capital guidance, according to a news release. Enable Midstream said it expects to maintain the $20 million reduction in 2021.
With the cost-cutting measures, Enable Midstream estimates savings of roughly $35 million for the year, growing to run-rate savings of about $70 million in 2021 for operation and maintenance and general and administrative expenses.
Enable Midstream also cut its quarterly distribution by 50% to 16.525 cents per common unit, from 33.05 cents per common unit. The partnership expects the distribution cut to generate $290 million of additional cash on an annualized basis.
Patterson-UTI trims 2020 capex, reduces executive compensation, operating costs
Responding to low oil prices and the novel coronavirus pandemic, Patterson-UTI Energy Inc. is trimming its 2020 capital expenditures to roughly $140 million, representing a 60% reduction from 2019 and a more than 40% reduction from the previously announced capex plan.
The U.S.-based driller is also decreasing the compensation of its executive group by more than 50%, according to an April 2 news release. In addition, Patterson is reducing operating costs in line with activity declines to lower general and administrative expenses and is closing some of its facilities. Patterson said it expects "meaningful declines" in its drilling rig count in April.
Murphy Oil further reduces 2020 capital program, cuts dividend
Murphy Oil Corp. again reduced its 2020 capital plan to a new midpoint of $780 million, down from the previous midpoint of $950 million announced in March. The new midpoint represents a 46% decrease from the original guidance midpoint of $1.45 billion, according to an April 1 news release.
In addition, Murphy Oil's board approved a 12.5-cent-per-share quarterly cash dividend, which is 50% lower than the previous dividend of 25 cents per share. The dividend is payable June 1 to stockholders of record as of May 18.
TechnipFMC to cut 2020 capital expenditures by 30%
In response to current market conditions, oilfield services provider TechnipFMC PLC plans to cut its 2020 capital expenditures by 30% to $300 million, a decrease of $150 million compared to its previous full-year guidance, according to an April 1 news release.
The company also announced at least $100 million in annualized cost reductions for its surface technologies segment due to a sharp decline in North American activity as well as $30 million in annualized cost reductions in corporate expenses, which are expected to be achieved by year-end and fully recognized in 2021.
Subsea 7 withdraws 2020 guidance, outlook statements
Due to low oil prices and coronavirus concerns, Luxembourg-based Subsea 7 SA withdrew the guidance and outlook statements that it announced Feb. 27. The company will give an updated market view along with its first-quarter 2020 results April 30.
Helmerich & Payne cuts dividends, spending budget as low energy prices persist
Helmerich & Payne Inc. will reduce its future quarterly dividends to 25 cents per share, from 71 cents per share, and lowered its 2020 gross capital expenditures to between $210 million and $230 million amid the ongoing weak commodity price environment.
The oil and gas driller previously provided capex guidance of $275 million to $300 million for 2020.
BP trims 2020 capital spending by 25%, to book $1B of charges in Q1
BP PLC cut its capital spending for 2020 to $12 billion, or around 25% below its year-ago guidance, to prepare for financial impacts of the low oil price environment. The British energy supermajor also said it expects to book about $1 billion in noncash, nonoperating charges in the first quarter.
BP's upstream segment will see a reduction in spending of about $1.0 billion mainly on short-cycle onshore activity, including its U.S. onshore oil and gas business BPX Energy, as well as deferred exploration and appraisal activities, according to an April 1 news release. For the downstream segment, BP expects to lower spending by another $1.0 billion by cutting expenses across its fuels marketing, refining and petrochemicals segments.
Imperial Oil slashes spending by a total of C$1B, suspends share repurchases
Imperial Oil Ltd. slashed its spending by a total of C$1 billion in response to a volatile market driven by the novel coronavirus pandemic and low oil prices.
Imperial reduced its 2020 capital outlook by C$500 million, resulting in a new budget of C$1.1 billion to C$1.2 billion, representing a 30% cut from the original guidance range of C$1.6 billion to C$1.7 billion. The Canadian oil and gas producer will also reduce operating expenses by C$500 million compared to 2019 levels, according to a March 31 news release.
Range Resources slashes capital budget again, but hopes to keep production flat
As energy prices remain weak, Range Resources Corp. cut its capital budget guidance for 2020 to $430 million while maintaining its production outlook at about 2.3 Bcfe/d.
The decrease represents a 40% reduction in spending compared to a year ago, Range CEO Jeff Ventura said in a March 31 news release. The Appalachian shale driller's previous 2020 capital budget was $520 million. The company anticipates improvements in natural gas and NGL pricing given "significant reductions in energy investment across U.S. shale," Ventura said.
Diamondback breaks down 2020 spending budget, revises production guidance
Diamondback Energy Inc. on March 31 provided more details on its 2020 guidance, providing a breakdown for its capital expenditure guidance of $1.5 billion to $1.9 billion and revising its 2020 production guidance.
The Permian Basin-focused shale driller's announcement follows previously announced plans to slash its capital budget as oil prices crashed. Diamondback budgeted $1.31 billion to $1.63 billion for drilling and completion, $100 million to $150 million for midstream capital and $90 million to $120 million for infrastructure capital, Diamondback said in a news release. Diamondback's production for 2020 is expected to be at a range of 295,000 boe/d to 310,000 boe/d.
Shell to book impairment charges of up to $800M on weak market conditions
Royal Dutch Shell PLC is looking at posttax impairment charges in the range of $400 million to $800 million for the first quarter of the year due to changes in the company's oil price outlook amid a burdened market.
Citing the impacts of the novel coronavirus pandemic and the oil price war between OPEC and Russia, Shell said it anticipates "significant uncertainty" in prices and demand for oil, gas and related products, according to March 31 news release. The integrated oil and gas major said the volatile market's impact on Shell's first-quarter results will mainly be reflected in the month of March, with the first two months only sustaining "a relatively minor impact."
PBF Energy to sell hydrogen plants for $530M, decreases 2020 spending budget
To help weather the current market volatility, PBF Energy Inc. executed several steps that include entering into a letter of intent with Air Products & Chemicals Inc. to sell five hydrogen facilities for cash proceeds of $530 million. The deal is expected to close in April.
In addition, PBF Energy decreased its 2020 capital expenditures by $240 million, which represents a 35% drop from the previous 2020 guidance. The independent refiner also reduced its corporate overhead expenses by more than $20 million on an annual basis, mainly be driven by salary reductions. PBF Energy also suspended its quarterly dividend of 30 cents per share. The refiner expects to preserve about $35 million of cash each quarter from the dividend suspension.
Devon Energy further slashes 2020 capital expenditures to $1B
Devon Energy Corp. again slashed its 2020 capital expenditures by an additional $300 million, further lowering the previously revised capital budget of about $1.3 billion to approximately $1 billion.
The latest reduction represents a 45% decrease from the corporation's original capital budget. Devon said the decrease will be driven by postponed activity in the Eagle Ford Shale, capital efficiency improvements in the Delaware Basin and lower service-cost pricing obtained across Devon's asset portfolio, according to a March 30 news release.
Eni to slash 2020 capex by €2 billion due to price collapse, coronavirus
Italian integrated oil and gas major Eni SpA will slash capital expenditures for 2020 by about €2 billion, or 25%, of its previously planned spend of approximately €8 billion, to adjust for market conditions caused by the coronavirus outbreak and plunging oil prices, the company said in a March 25 news release.
The company, which also intends to cut operating expenses for this year by around €400 million, said it may also reduce 2021 capital spending by €2.5 billion to €3 billion, or about 30% to 35% of its previously estimated figure. The majority of Eni's spending cuts this year will involve its upstream activities, "particularly production optimization and new project developments scheduled to start in the short term," it said.
Petrobras to cut spending, postpone dividends amid oil price crash
Brazilian state-run oil company Petróleo Brasileiro SA - Petrobras is implementing financial measures, including spending cuts and a proposal to postpone its dividend, to soften the impact of the new coronavirus pandemic and the recent oil price downturn on the business.
The company, also known as Petrobras, will lower planned investments for the year to $8.5 billion, from $12 billion, by deferring exploratory activities, well interconnections and construction of production and refining facilities, according to a March 26 news release. Petrobras will submit for shareholder approval a postponement of dividend payments amounting to 1.7 billion reais to Dec. 15.
Repsol to slash capital expenditures by more than €1B
Repsol SA is planning to reduce capital expenditures by more than €1 billion, along with implementing optimizations in working capital of about €800 million, in response to the oil price crash and the novel coronavirus pandemic.
The Spanish integrated energy company is also looking to decrease operating expenditures by more than €350 million, according to a March 25 news release.
With liquids prices tanking, Appalachian driller shifts spending toward gas
In response to brutal oil market conditions, Montage Resources Corp. trimmed its full-year capital spending by $45 million and said it would shift its focus toward dry gas wells in the Utica Shale.
Montage said it expects to spend between $145 million and $165 million, a 23% reduction at the midpoint of its previously announced guidance between $190 million and $210 million. A change in strategy will accompany the cut in spending. "[Montage] anticipates approximately 75% of the wells drilled to be in the company's Ohio Utica acreage and approximately 25% in the Ohio Marcellus acreage area, which is a meaningful shift from the 35% Utica Dry/65% Marcellus split in the previous capital spending plan," it said in a March 25 release.
Equinor to cut $3 billion in 2020 capex, operating costs in light of oil plunge
Norwegian-state controlled Equinor ASA will slash capital expenditures as well as exploration and operating costs by a total of $3 billion due to the upheaval caused by the coronavirus pandemic and plummeting oil prices, according to a March 25 news release.
The major plans to cut organic capital expenditures by $2 billion to $8.5 billion, down about 19% from a prior range of $10 billion to $11 billion. In addition, it will reduce exploration expenses from $1.4 billion to $1 billion and will trim operating costs by about $700 million from original estimates. As part of its cost reduction plan, Equinor will suspend all U.S. onshore activities, drilling and completion activities.
Fighting low oil prices, Occidental cuts spending plans by another $800M
Embattled oil producer Occidental Petroleum Corp. slashed its spending plans for the second time in a month as it tries to navigate a low oil price environment and heat from activist investor Carl Icahn.
The new spending guidance, between $2.7 billion to $2.9 billion, is down from the $3.5 billion to $3.7 billion range given March 10 and represents a 47% decrease from the midpoint of the company's initial 2020 spending plan of $5.2 billion to $5.4 billion. Given the significant reduction in spending, Occidental pulled back its outlook for production.
In addition to trimming its spending plan, Occidental said it will cut 2020 operating and corporate costs by at least $600 million, which includes "significant" salary cuts for the corporation's executive team.
Energy Transfer unit Sunoco lowers 2020 spending budget by 40%
To protect against the impact of the low price environment, Energy Transfer LP's fuel distributor subsidiary, Sunoco LP, will reduce its growth capital expenditures for the year to about $75 million, a decrease of 40% compared to its previous guidance of $130 million.
The partnership also plans to cut 2020 maintenance capital expenditures to $30 million, down 30% from the original $45 million, and reduce operating costs, focusing on general and administrative and other operating expenses, according to a March 24 news release.
Schlumberger to cut 2020 capex 30% YOY, almost all from North America land
Schlumberger Ltd. plans to drastically cut its 2020 capital spending to defend its balance sheet as producer activity sinks with crude oil prices amid the Russia-OPEC production war and demand erosion resulting from the coronavirus pandemic.
The world's largest public oilfield services company plans to cut capital spending by up to 30% from 2019 levels, with almost all of the cuts coming from its North America land operations, as 80% of its free cash flow comes from international market operations, President and CEO Olivier Le Peuch said March 24 in a presentation at the Scotia Howard Weil Energy Conference in Houston.
Antero Resources trims 2020 capital budget to $1.0B
Antero Resources Corp. on March 24 said it further trimmed its 2020 drilling and completion capital budget to $1.0 billion, from $1.15 billion. Antero does not anticipate the reduced capital budget will affect the corporation's 2020 production estimates, according to an SEC filing.
Phillips 66 slashes 2020 capital spending by $700M, suspends share repurchases
Phillips 66 on March 24 said it is slashing its 2020 consolidated capital spending by $700 million, to $3.1 billion, as a response to the recently challenged markets.
Phillips 66 now expects capital spending, net of cash capital contributions from joint venture partners, of $3.0 billion, down from $3.3 billion, according to a news release. Phillips 66 also suspended its share repurchases, effective March 18. The company has executed share repurchases during the first quarter of approximately $440 million.
Chevron cuts $4B from spending plan, suspends buyback to combat low prices
Chevron Corp. is cutting its 2020 organic capital and exploratory spending guidance by 20% to $16 billion as a measure to preserve cash and protect its balance sheet amid declining oil prices.
The integrated oil and gas major is also planning to decrease its cash capital and exploratory expenditures for the year by $3.3 billion, to $10.5 billion. Total capital and exploratory spending in the second half of the year is projected to be roughly $7 billion, which is 30% lower than the budget previously announced in December 2019.
Chevron also suspended its $5 billion annual share repurchase program, after having repurchased $1.75 billion of shares during the first quarter of the year.
EnLink Midstream slashes quarterly distribution by 50% amid oil price crash
To further preserve its liquidity and manage its balance sheet, EnLink Midstream LLC on March 24 said it will reduce its quarterly common unit distribution by 50% to 9.375 cents per unit, from 18.75 cents per unit paid for the fourth quarter of 2019.
The lowered distribution is projected to result in roughly $185 million of additional cash available to EnLink Midstream for the year, according to a news release. The midstream company is also looking at a potential $50 million of incremental expense savings across its cost structure during the year.
Suncor decreases 2020 capital program by 26%, extends projects timelines
Due to the declining oil prices and the novel coronavirus pandemic, Suncor Energy Inc. lowered its 2020 capital program to between C$3.9 billion and C$4.5 billion, a decrease of C$1.5 billion or 26% from the midpoint of the original guidance range of C$5.4 billion to C$6.0 billion.
Suncor also slashed its total operating expenditures by more than C$1 billion, from C$11.2 billion of expenditures in 2019. Suncor decided to extend for up to two years the timelines for the cogeneration facility at the company's oil sands base plant, Forty Mile wind power project and some offshore developments. The company and its partners also reduced its Fort Hills mine to a one-train operation.
Lundin Petroleum to reduce 2020 costs by $170M amid lower oil prices
In response to the ongoing downturn in oil prices, Lundin Petroleum AB plans to implement $170 million in cost reductions, including general and administrative expenses, in 2020. In addition, Lundin's board of directors amended its dividend proposal to $1 per share, down from $1.80 per share.
Helmerich & Payne considering capex cuts amid market volatility
Oilfield service company Helmerich & Payne is implementing cost controls and reevaluating its capital allocation in the face of weak commodity prices and the novel coronavirus pandemic.
The company withdrew its fiscal second-quarter guidance and is reassessing its cost structure as rig activity levels continue to drop, according to a March 23 news release. Helmerich & Payne is also reexamining its cash deployment plans, including future dividends. It expects to issue updated guidance as part of its second-quarter earnings results.
Talos Energy details 2020 capital spending reductions
U.S. Gulf of Mexico-focused driller Talos Energy Inc. said it is implementing a total of $170 million in capital spending cuts for 2020, resulting in a new guidance range of $720 million to $775 million. The company previously said it is lowering its 2020 capital and operating expenses by more than $125 million.
The reductions include a $140 million cut in capital expenditures, $10 million in general and administrative expenses and $20 million in cash operating expenses, according to a March 23 news release. Talos said it will continue to evaluate more opportunities to further cut costs.
Aker BP trims 2020 capex to $1.2B, defers development projects
Due to the market uncertainty brought by the novel coronavirus pandemic, Aker BP ASA is trimming its 2020 capital expenditures by 20% to approximately $1.2 billion, as the company defers all of its nonsanctioned field development projects.
Aker BP is reducing its 2020 exploration spending by 20%, while production costs were decreased to a range of $7 to $8 per barrel of oil equivalent, from $10/boe. However, the Norwegian North Sea producer's 2020 production guidance will still be in the range of 205,000 boe/d to 220,000 boe/d.
DCP Midstream slashes distribution payout by 50%, capital spending by 75%
DCP Midstream has decided to reduce its distribution payout by 50% and its growth capital program by 75% in 2020 in response to volatile market conditions. These actions are intended to optimize over $850 million in cash flows to improve leverage and liquidity.
The partnership will free up $325 million in cash by reducing the distribution to $1.56 per unit annually. DCP Midstream also said that it is cutting its growth capital program to $150 million, from a guidance midpoint of $600 million.
On April 13, DCP Midstream announced a 15% reduction in its workforce. The partnership's senior executive also reduced their salaries by 10% to 15%. DCP noted that the moves are expected to result in $40 million of incremental retained cash flow. In addition, the partnership said that it identified $10 million of incremental sustaining capital reductions.
Santos cuts 2020 capex by 38% due to low oil prices, coronavirus outbreak
Australia's Santos Ltd. is slashing its 2020 capital expenditure by $550 million, or 38%, as a response to low oil prices and the novel coronavirus pandemic.
The company is also decreasing its forecast capital expenditure in the base business for the year by $200 million while maintaining production, according to a March 23 news release. Discretionary expenditure and exploration programs would also be postponed. In addition, Santos trimmed its forecast major growth capital expenditure by $350 million, and its 2020 cash production costs by $50 million.
Equinor postpones $5B share buyback program amid troubled market
Equinor on March 22 said it is suspending the company's up-to-$5 billion share buyback program given the current market turbulence driven by the novel coronavirus pandemic and tanking oil prices.
In addition, Equinor is adopting measures to decrease its capital expenditures, operating costs and exploration spend. The company will present an updated 2020 outlook by the end of March.
Total reduces capex by over 20%, halts share buybacks
French oil major Total SA is immediately cutting organic capital expenditures by more than $3 billion and suspending its $2 billion buyback program in response to the sharp decrease in oil prices.
The revised capex will reduce net investments for this year to less than $15 billion, with savings mostly in the form of short-cycle flexible capex, which Total can arbitrate contractually over a short period of time.
Shell cuts 2020 capex, suspends share buybacks
Shell is cutting capital expenditures and suspending share buybacks by implementing operational and financial initiatives to weather the oil price crash and slowing demand due to the coronavirus outbreak.
These initiatives are expected to reduce cash capex to $20 billion or below, from a planned level of around $25 billion, this year; cut underlying operating costs by $3 billion to $4 billion per year over the next 12 months compared to 2019 levels, and result in lower working capital.
Inter Pipeline cuts 2020 capital spending by C$60M to C$120M
Inter Pipeline decreased its previously declared C$1.2 billion 2020 capital program by C$60 million to C$120 million amid the oil price crash and the COVID-19 pandemic.
Inter Pipeline will continue to build the C$3.5 billion Heartland Petrochemical Complex in Strathcona County, Alberta, and it will be the focus of the capital program, according to a March 19 news release.
Eni withdraws €400M share buyback proposal amid coronavirus, oil price crash
Due to the novel coronavirus outbreak and the tanking oil prices, Eni SpA on March 18 said it decided to withdraw its treasury share buyback proposal amounting to €400 million in the year. The oil major also said it has started a revision of its near-term planned activities and will consider a strong capital expenditure reduction.
Imperial Oil launches review of 2020 capital spending
Canadian refiner and oil producer Imperial Oil is reviewing its spending plans for the year in response to the low oil price environment. The company said it is currently in a low capital investment period, with most of its capital being spent on maintenance and operations.
As of year-end 2019, Imperial has over C$1.7 billion of cash on hand, according to a March 19 news release.
HighPoint Resources to suspend all new development activity
The DJ Basin-focused driller HighPoint Resources Corp. will defer all new planned activity under its 2020 development program as a result of an ongoing oil price crash. The company will remain flexible to adjust its capital program based on market conditions, according to a March 19 news release.
HighPoint will complete all drilling and completion activity that is still in progress. The activity suspension is not expected to affect HighPoint's production volumes in the first half of the year.
Paramount Resources lowers 2020 spending by 46%
Due to the drop in oil prices, Canadian oil and gas producer Paramount Resources Ltd. cut its 2020 spending guidance to a range of C$185 million to C$250 million. The new budget is 46% lower at the midpoint than the original budget of C$350 million to C$450 million.
The company also expects to report average sales volumes for 2020 of between 70,000 boe/d and 75,000 boe/d, a 6% decrease at the midpoint compared to the previous forecast of 75,000 boe/d to 80,000 boe/d. Paramount will focus spending on its liquids-rich Montney assets in the Grande Prairie region, according to a March 19 news release.
Continental Resources cuts 2020 capital budget by 55%
Continental Resources reduced its 2020 capital budget to $1.20 billion, from an original budget of $2.65 billion, as a response to the falling oil prices.
In addition, Continental Resources will decrease its average rig count from nine to about three rigs in the Bakken Shale, while its 10.5 rig count in Oklahoma will be reduced to approximately four. The company also said it expects production for the year to be down less than 5% year over year.
Diamondback details 2020 spending cut, to further reduce activity
After being the first shale driller to signal a spending cut amid the oil price collapse, Diamondback on March 19 detailed that it anticipates lowering its 2020 capital budget by $1.2 billion at the midpoint. The Permian Basin-focused oil and gas producer's spending plan is now at a range of $1.5 billion to $1.9 billion, from the previous range of $2.8 billion to $3.0 billion.
To cut down on expenses, Diamondback further reduced its activity levels from its previous announcement. The company will operate between three and five completion crews for the rest of the year and cut its rig count by more than 50% compared to earlier in the year.
As a result of lower activity levels, Diamondback subsidiary Rattler Midstream LP updated its 2020 adjusted EBITDA guidance to a range of $260 million to $300 million and lowered its 2020 operated midstream capital expenditures to a range of $100 million to $150 million. Viper Energy Partners LP, another Diamondback unit, revised its 2020 average daily production guidance to a range of 22,500 boe/d to 27,000 boe/d.
Targa trims 2020 capex by 32%, cuts quarterly dividend
Targa Resources Corp. reduced its 2020 capital expenditures to a range of $800 million to $900 million, from the previous range of $1.2 billion to $1.3 billion, representing a 32% decrease at the midpoint. Most of the budget will be used to fund major ongoing projects on which the company has already spent a large amount of capital.
The midstream corporation also lowered its quarterly dividend for the quarter ended March 31 to 10 cents per share, from 91 cents per share in the prior quarter, which is expected to provide for roughly $755 million of additional annual cash flow that could be used to reduce debt.
Enterprise raises quarterly distribution, reviews capital expenditure
Enterprise Products Partners LP declared a quarterly cash distribution increase of 1.7% from the distribution announced in the first quarter of 2019 and said it would reevaluate its capital expenditures amid the oil price downturn.
"While substantially all of our major growth capital projects are supported by long-term bilateral agreements, we are in discussions with our customers and evaluating opportunities to reduce or defer capital expenditures, as well as continuing to explore joint venture opportunities with strategic partners," Jim Teague, co-CEO of Enterprise's general partner, said in the release.
Dril-Quip withdraws Q1 2020 guidance amid volatile market conditions
Oilfield service company Dril-Quip Inc. withdrew its previously announced guidance for the first quarter as it grapples with producer customers' capital spending revisions for the year.
The company is also reevaluating its capital expenditures and re-prioritizing research and development to cut costs in response to the low oil price environment and the coronavirus pandemic, according to a March 18 news release. Dril-Quip's cash position is at $399 million as of the end of 2019 and its balance sheet is free of debt, Dril-Quip President and CEO Blake DeBerry said in the release.
Baytex Energy cuts 2020 capital budget by 50%
Baytex Energy Corp. reduced its 2020 capital budget by roughly 50% to a range of C$260 million to C$290 million, from the original budget of C$500 million to C$575 million, according to a March 18 news release.
The Calgary, Alberta-based oil and gas company also announced that it will immediately suspend drilling operations in Canada. As a result of shutting in heavy oil production and reducing its capital program, Baytex revised its production guidance to 85,000 boe/d to 89,000 boe/d, from the original range of 93,000 boe/d to 97,000 boe/d.
Canadian Natural Resources cuts 2020 spending by C$1.09B
Owing to continued commodity price volatility, Canada's biggest oil company by volume, Canadian Natural Resources Ltd., cut its 2020 capital spending budget to C$2.96 billion, down C$1.09 billion from the original budget of C$4.05 billion, according to a March 18 news release.
The oil and natural gas production company revised its conventional/unconventional budget to C$990 million from C$1.55 billion and its long-life low decline budget to C$1.97 billion from C$2.50 billion. However, there is no change to Canadian Natural's 2020 production guidance of 1.14 million boe/d to 1.21 million boe/d. The company also reduced the annual salaries of some of its executives and the annual board cash retainer of its board of directors.
ConocoPhillips trims capital expenditures by $700M amid oil price downturn
ConocoPhillips is cutting its capital expenditures by $700 million, a 10% decrease from its previously announced guidance, in response to the oil price crash.
The spending cut will come from slowing operated and nonoperated development activity in the Lower 48 and deferred drilling in Alaska, according to a March 18 news release. These are expected to affect full-year production guidance by about 20,000 boe/d.
Pembina to slash 2020 capital budget by up to 50%, defer several projects
Pembina Pipeline Corp. is planning to slash between C$900 million and C$1.1 billion from its previously announced 2020 capital budget, or about 40% to 50%, in response to the novel coronavirus outbreak and continuing low oil prices.
The partnership's new budget for the year is C$1.2 billion to C$1.4 billion, down from its previously announced budget of C$2.3 billion, according to a March 18 news release. To lower spending, Calgary, Alberta-based Pembina will postpone expansion projects that were slated to enter service in 2021 through 2023.
Parsley Energy cuts 2020 capital budget by over 40%
After earlier lowering its budget assumptions, independent Permian Basin-focused shale driller Parsley Energy Inc. reduced its capital budget for the year to less than $1.0 billion, representing a 40% decrease at the midpoint from the previous budget of $1.6 billion to $1.8 billion.
To weather the commodity price environment and generate free cash flow, Parsley will reduce development activity for the year. Since dropping to three frac spreads and advancing plans to drop to 12 rigs, Parsley is now planning to cut activity to four to six rigs and two to three frac spreads.
Cimarex to further shrink 2020 capital program by up to 50%
Cimarex Energy Co. is anticipating a 40% to 50% decrease in its already lowered capital investment program, previously set at $1.25 billion to $1.35 billion, due to the recent oil price collapse.
Cimarex said its revised outlook assumes a West Texas Intermediate price of $30/barrel for the rest of the year, according to a March 17 news release. The lower budget is expected to hold annual oil production steady over year-ago levels, according to Cimarex.
"Under this scenario, Cimarex will not incur additional debt in 2020 and will generate sufficient free cash flow to preserve payment of our dividend to our shareholders," Thomas Jorden, Cimarex chairman, president and CEO, said in the release.
Whitecap Resources slashes 2020 capital budget by 44%
Whitecap Resources Inc. is decreasing its 2020 capital program to a range of C$200 million to C$210 million, representing a C$160 million, or 44%, drop from the company's previous range of C$350 million to C$370 million.
Whitecap Resources said it will allocate the lowered capital program to asset integrity, health and safety programs and carbon dioxide purchases at the company's carbon sequestration project in Weyburn, Saskatchewan, according to a March 17 news release. The company's 2020 average production is anticipated to be in the range of 67,000 boe/d to 68,000 boe/d, representing a 6% drop from the previous range of 71,000 boe/d to 72,000 boe/d.
The company also decreased its monthly dividend to 1.425 Canadian cents per share, from 2.85 Canadian cents per share, effective for the April dividend payable in May. Whitecap Resources said it ended 2019 with roughly C$580 million of liquidity and no near-term debt maturities through 2022.
Shale oil driller WPX cuts 2020 spending 25%, will hold production flat
Bakken Shale and Permian Basin shale oil driller WPX Energy Inc. said March 17 that it will cut its 2020 capital spending by $400 million, or about 25%, and would hold production flat at 150,000 bbl/d of crude while staying cash flow positive.
In the face of declining oil prices, the Oklahoma driller said it was ready to make further cuts if the prices continued to fall. Under the revised plan, WPX will still generate $150 million in free cash flow, the company said, while spending between $1.28 billion and $1.40 billion. At the same time, WPX said it was talking with its third-party service providers about further cost cuts that could drive its cash flow higher.
Hess cuts capital budget by $800M, to hold off on drilling activity
Hess Corp. reduced its capital budget for the year by $800 million to $2.2 billion, attributing the revision to the low oil price environment. With the new capital and exploratory budget, Hess aims to preserve cash and its investment in Guyana, according to a March 17 news release.
Hess plans to cut its six-rig program in the Bakken Shale to just one rig, which is scheduled for completion in May. Most of its discretionary and offshore drilling activities will be suspended, with the exception of Guyana.
Meanwhile, Hess' subsidiary Hess Midstream LP reduced its full-year net income guidance to $420 million to $440 million, and adjusted EBITDA guidance to $690 million to $710 million, representing a 4% reduction at the midpoint over previous guidance. The cut was attributed to lower expected throughput volumes, as a result of reduced rig activity across the Bakken. Hess Midstream also lowered its expansion capital expenditures for 2020 and 2021 by an aggregate $200 million.
Penn Virginia cuts budget by 30%
Eagle Ford Shale-focused producer Penn Virginia Corp. reduced its capital budget for the year by about 30% over the original budget as the oil price rout continues.
Penn Virginia anticipates maintaining one active rig starting April and through the rest of the year, according to a March 17 news release. The company may cut its budget further, depending on market conditions.
Concho to slash 2020 capital spending by more than 25% amid oil price plunge
In light of the recent oil price collapse, independent producer Concho Resources Inc. will slash spending this year to $2.0 billion, down more than 25% from the original range of $2.6 billion to $2.7 billion, the company said in a March 17 news release.
"Concho is well positioned to weather the turmoil in the oil markets due to our high-quality asset base, low-cost structure, strong balance sheet, and large, uncomplicated hedge book," Concho chairman and CEO Tim Leach said. The Permian-focused producer will monitor rapidly evolving market conditions and could opt to cut spending further.
Callon reduces 2020 budget, cuts down on activity amid low oil price environment
Callon Petroleum Co. slashed its capital plan to $700 million to $725 million, from $975 million, for the full year, which is expected to result in flat production growth year over year compared to its predecessor companies' combined volumes for 2019.
Callon will also cut its operated rig count to five, from nine, by the end of the second quarter, as well as its frac crew count to two, from five, when certain projects are completed, according to a March 17 news release. Capital allocation will be focused on "high return, shorter cash cycle projects" in the Midland Basin and Eagle Ford Shale, but the company will keep its long-term strategy in the Delaware Basin.
W&T Offshore trims capital budget for 2020 due to oil price decline
W&T Offshore Inc. lowered its capital expenditure estimate for 2020 to $15 million to $25 million, from $50 million to $100 million, while keeping its annual production guidance the same.
The oil and gas producer also reduced its planned asset retirement expenditures to $10 million to $20 million, from $15 million to $25 million. Its 2020 production guidance remains at 47,100 boe/d to 52,100 boe/d, according to a March 17 news release.
EnLink Midstream cuts 2020 capital spending on falling oil prices
EnLink Midstream adds to the list of energy midstream companies to cut its 2020 spending plans as the oil price downturn persists, reducing its capital expenditures guidance for the year by 30%.
The company's spending guidance is now $225 million to $285 million, down from the previously announced $315 million to $425 million. The new guidance would be a 60% drop compared to EnLink's 2019 capex. EnLink attributed its decision to customers cutting down on drilling and completions activity as a result of the current price environment. The company said it is prepared to make further cuts if necessary, based on communication with its producer customers.
Kosmos Energy reduces capital budget, suspends dividend
Independent oil and gas producer Kosmos Energy is aiming to cut its capital budget for 2020 for the base business to under $250 million, representing a decrease of roughly 30%. The company is also suspending its dividend after its fourth-quarter 2019 payment, which is expected to yield about $75 million of savings annually.
Kosmos' previous 2020 capital budget was $325 million to $375 million. Cost reductions will be implemented, including layoffs and suspension of employee cash bonuses in 2020. The company is keeping 2020 production flat and expects minimal impact on 2021 production, according to a March 17 news release.
Pioneer cuts 2020 capital spending, will reduce rig count by 50%
In response to lower oil prices and global macroeconomic uncertainty, Pioneer Natural Resources Co. announced a number of reductions to bring its 2020 total capital budget to $1.7 billion to $1.9 billion, according to a March 16 news release.
The company cut its 2020 drilling, completion and facilities capital budget by 45% and expects it to range between $1.6 billion and $1.8 billion. Pioneer reduced its budgeted water infrastructure spending from $125 million to about $100 million.
Within the next two months, Pioneer also plans to reduce its operated rig count from 22 to 11 and cut its six contracted completion crews by at least half. Full-year 2020 production is expected to be similar to the company's 2019 Permian Basin oil production average of about 211,000 bbl/d.
Citing crashing and volatile oil prices, EOG Resources Inc. slashed its 2020 capital plan by 31%, down to a range of $4.3 billion to $4.7 billion.
EOG, one of the largest shale oil producers, said it anticipates net cash from operating activities to fund both the company's capital expenditures and dividend payments, assuming oil prices remain in the mid-$30 for the rest of the year, according to a March 16 news release.
Keyera posts 2020 marketing guidance, expects to decrease 2021 capex
Keyera Corp. on March 16 said it anticipates 2020 realized margin for the corporation's marketing segment to be in the range of $270 million and $310 million, which tops the base guidance range of $180 million and $220 million.
Keyera is also expecting to benefit from a cash tax recovery of between $15 million and $25 million, as well as a maintenance capital expenditure range of $35 million to $45 million, according to a news release. For 2019, Keyera's cash tax expense and maintenance capital expenditure were $98 million and $105 million, respectively.
EQT further slashes 2020 capex guidance by $75M
EQT Corp. on March 16 said it further reduced its 2020 capital expenditure guidance to a range of $1.075 billion to $1.175 billion, representing a decrease of $75 million since its last update and a cut of roughly $200 million since the company initially offered its capex guidance in October 2019.
The lowered expenditure guidance reflects EQT's decreased development activity in its Ohio Utica operations, according to a news release. EQT said it does not expect the decreased activity to affect the corporation's 2020 production guidance range of 1.45 Tcfe to 1.50 Tcfe.
Whiting Petroleum revises capital budget, to reduce activity
Whiting Petroleum Corp. adopted a revised capital budget range of $400 million to $435 million, which represents a $185 million or 30% decrease at the midpoint of the corporation's previous 2020 capital budget.
Whiting Petroleum will also drop one rig and one completion crew within April, according to a March 16 news release. The reduced budget is expected to moderately impact the oil and gas producer's full-year total production and oil production.
Crescent Point revises 2020 capital spending by 35%
Crescent Point Energy Corp. on March 16 revised its 2020 capital expenditure budget to a range of C$700 million to C$800 million.
The revised budget is anticipated to generate annual average production of 130,000 boe/d to 134,000 boe/d, according to a news release. Crescent Point said it also plans to change its quarterly cash dividend and is deferring share repurchases under its normal course issuer bid.
NuVista Energy decreases 2020 capital spending program by 25%
NuVista Energy Ltd. on March 16 said it reduced its 2020 capital spending program to no more than C$240 million, from a previous guidance range of C$300 million to C$330 million, effective immediately.
The company's first-quarter capital spending was decreased to C$135 million, from C$150 million. Production for the year is anticipated to be in the range of 54,000 boe/d to 57,000 boe/d.
NuVista Energy said it can still reduce its 2020 spending to below C$200 million if commodity prices go down further.
Goodrich Petroleum lowers capital expenditure budget but increases 2020 production
Goodrich Petroleum Corp. decreased its 2020 preliminary capital expenditure budget to a range of $40 million to $50 million, representing a reduction of $15 million.
The budget reduction is anticipated to generate a free cash flow range of approximately $15 million to $25 million, at natural gas prices of $2.00 to $2.50, according to a March 16 news release.
Goodrich Petroleum said it expects to increase 2020 production year over year by 5% to 7%, to a range of 50 Bcfe to 52 Bcfe, 99% of which is composed of natural gas.
Enerplus decreases 2020 capital budget to C$325M, to stop drilling, completions activity
Enerplus Corp. is cutting its 2020 capital spending budget down to C$325 million, or about 40% at the midpoint of the corporation's previous 2020 guidance range of C$520 million to C$570 million, effective immediately.
Enerplus also plans to halt all operated drilling and completions activity in North Dakota by mid-April, according to a March 16 news release. The revised plan leaves Enerplus with 32 gross drilled uncompleted wells in North Dakota.
Under the new capital program, crude oil and NGLs production for 2020 is anticipated to average between 50,000 bbl/d to 52,000 bbl/d, from the previous range of 57,000 bbl/d to 60,000 bbl/d.
Vermilion Energy reduces 2020 capital budget, monthly dividend
Due to the decline in oil prices driven by the coronavirus outbreak and oil price war, Vermilion Energy Inc. will reduce its 2020 capital budget by C$80 million to C$100 million, to a range of C$350 million to C$370 million.
The company also decreased its monthly dividend to 2 Canadian cents per share, from 11.5 Canadian cents per share, according to a March 16 news release. The new dividend will be payable in May.
Vermilion said the lower capital budget and dividend reduced the company's annualized cash outlays by an additional C$260 million to C$280 million. The company's 2020 production is expected to be in the range of 94,000 boe/d to 98,000 boe/d.
QEP Resources Inc. is trimming its 2020 and 2021 combined capital expenditures by more than $300 million in response to the plunging oil prices.
The oil and gas producer will suspend completion operations in the Permian Basin from early May through the beginning of the fourth quarter, according to a March 13 news release. QEP Resources also plans to release its intermediate drilling rig operating in the basin when its operation concludes in March. Additionally, the company is postponing its refracturing program in the Williston Basin.
QEP Resources said it expects to suspend its quarterly dividend of 2 cents per share, after payment of its fourth-quarter 2019 dividend on March 20.
Noble Midstream lowers 2020 capital guidance due to price volatility
Noble Midstream Partners LP said it has decreased its 2020 organic capital guidance to a range of $120 million to $150 million, given the current market volatility. The new guidance reflects updated producer forecasts in the DJ and Delaware basins and is expected to yield savings that would offset cash flow loss from lower activity levels.
Noble Midstream previously set its 2020 capital expenditures to be in the range of $190 million to $230 million.
Noble Energy trims 2020 expenditure guidance by $550M amid oil price downturn
Noble Energy Inc. cut its capital expenditure guidance for 2020 by about $500 million, or nearly 30%, amid the oil price crash.
The capital budget for the year now ranges between $1.1 billion and $1.3 billion, according to a March 12 news release. About 80% of the cuts will occur in the U.S. onshore business, with more than half taking place in the Delaware Basin. The company will cut about $100 million internationally from major project execution, deferral of noncritical spending into future years and the exploration program.
Devon Energy reduces capital for 2020, reaffirms financial position
Devon Energy decreased its capital spending for 2020 by $500 million in response to the challenging commodity price environment. The revised capital budget is now approximately $1.3 billion, nearly a 30 percent decline compared to the previous capital plan, according to a March 12 news release.
The $500 million in cuts will be spread across Devon's portfolio, with the STACK and Powder River Basin assets receiving the most substantial cuts proportionally. The company said it will focus its development activity within the economic core of the Delaware Basin and Eagle Ford.
Devon said it entered 2020 with $1.8 billion and an undrawn credit facility of $3 billion. The company also has no outstanding debt maturities occurring until the end of 2025.
Apache slashes 2020 capital guidance, curbs quarterly dividend
In response to weak oil prices, Apache Corp. decreased its 2020 capital investment plan to a range of $1.0 billion to $1.2 billion, from the previous range of $1.6 billion to $1.9 billion. The oil and gas producer will also reduce its quarterly dividend to 2.5 cents per share, from the previous dividend of 25 cents per share, according to a March 12 news release.
In addition, Apache said it plans to drop its Permian rig count to zero and reduce activities in Egypt and the North Sea.
Murphy Oil reduces 2020 budget to $950M, postpones projects, wells
Murphy Oil lowered its 2020 budget to approximately $950 million, representing a decrease of roughly $500 million from the previous budget range of $1.4 billion to $1.5 billion.
In line with the revised budget plan, the corporation said it will delay some U.S. Gulf of Mexico projects and development wells, hold off on spud timing of two operated exploration wells, release operated rigs and frac crews in the Eagle Ford Shale region, and defer well completions in the Tupper Montney gas resource play, according to a March 12 news release. Murphy Oil also has no operated activity planned for the second half of the year in the Eagle Ford Shale region.
As of year-end 2019, Murphy Oil has an undrawn $1.6 billion senior unsecured credit facility due November 2023. The corporation also has no debt maturities until June 2022, Murphy Oil President and CEO Roger Jenkins said in the release.
Pipestone Energy slashes 2020 capital guidance by 60%, decreases production range
Pipestone Energy Corp. is decreasing its annual capital spending program to a range of C$55 million to C$65 million, from a previous range of C$145 million to C$155 million, in an effort to protect its balance sheet amid the low oil price environment. Pipestone Energy is also lowering its production guidance to a range of 17,000 boe/d to 18,000 boe/d, from a previous range of 18,000 boe/d to 20,000 boe/d.
The corporation's exit production guidance is decreased to a range of 16,000 boe/d to 17,000 boe/d, from a range of 20,000 boe/d to 22,000 boe/d.
As of year-end 2019, Pipestone Energy has withdrawn approximately C$163 million under its reserve-based loan, which has an available capacity of C$225 million with an option to increase by C$25 million.
Talos Energy cuts over $125M from 2020 capital, operating expenditure guidance
Using the flexibility provided by its short-term rig contracts, Talos Energy Inc. will lower its 2020 capital and operating expenses by more than $125 million, according to a March 11 earnings release. With this and other changes to its spending guidance, the company expects to generate positive free cash flow with average West Texas Intermediate prices of $30 per barrel or higher, inclusive of its existing hedge position.
PDC Energy cuts full-year 2020 capital investments by 20-25%
PDC Energy Inc. plans to reduce its full-year capital investments by 20% to 25%, compared to the original range of $1.00 billion to $1.10 billion. The company also projects free cash flow of over $150 million for 2020, according to a March 11 news release.
Production is anticipated to average close to pro forma 2019 volumes of around 200,000 boe/d, while oil output should average about 73,000 bbl/d.
PDC Energy is also looking to defer 10 to 15 previously planned wells into 2021 and suspend deployment of a second drilling rig in the Delaware Basin, leaving just one rig running in the basin for the remainder of the year. The company will also reduce activity in the Wattenberg field in the second quarter, cutting drilling rigs to two from three, and completion crews to one from two.
ONEOK trims 2020 capital spending amid oil price crash
Midstream service provider ONEOK Inc. is decreasing its 2020 growth capital guidance by $500 million at the midpoint amid the drop in oil prices. Capital-growth expenditures are now expected to range between $1.60 billion and $2.40 billion with a midpoint of $2.00 billion, which is $500 million lower than the previously declared midpoint, according to a March 11 news release.
Oneok is also suspending work on its 100,000-bbl/d expansion of the West Texas LPG Pipeline LP in the Permian Basin; and the 200-MMcf/d expansion of the Demicks Lake gas processing facility, the Demicks Lake III project and related infrastructure in the Williston Basin. The company is also reducing the scope of the Elk Creek Pipeline expansion.
Matador Resources to drop three rigs, suspend development activities in Texas
As part of its plan to reduce capital spending amid the oil price crash, Matador Resources Co. is reducing its operated drilling program to three rigs from six before June 30. The company anticipates releasing one of the rigs by the end of March, and then another two before the end of the second quarter.
Matador also said it anticipates holding off on development activities in the Wolf asset area in Loving County, Texas, by the end of the first quarter.
In addition, the company's executive officers and board members agreed to reduce their base salaries. Matador's borrowing base remains at $900 million, while its elected borrowing commitment was raised to $700 million, from $500 million. Matador's revolving credit facility matures in October 2023, while its senior unsecured notes mature in September 2026.
Seven Generations decreases 2020 capital budget, production
Seven Generations Energy Ltd. decreased its 2020 capital investment budget to C$900 million, representing an 18% drop from the company's previous budget of C$1.1 billion. The company also lowered its annual 2020 production to average between 185,000 boe/d and 190,000 boe/d, from the previous range of 200,000 boe/d to 205,000 boe/d.
Seven Generations also renewed its C$1.4 billion credit facility to mature in 2024. Its senior unsecured notes are scheduled to mature in 2023 and 2025.
MEG Energy lowers capital program by 20%, production guidance
MEG Energy Corp. reduced its 2020 capital program by 20% to C$200 million, from the initial C$250 million budget announced in November 2019. MEG Energy also decreased its production guidance range for the year to a range of 93,000 bbl/d to 95,000 bbl/d, from the previous range of 94,000 bbl/d to 97,000 bbl/d.
The Calgary, Alberta-based oil producer's earliest maturing long-term debt is its US$600 million of senior unsecured notes due March 2024. MEG Energy's C$800 million revolving credit facility is still undrawn.
Occidental trading halted as company slashes capex, dividend
Trading of Occidental Petroleum stock on the NYSE was briefly halted in the early afternoon March 10 as the company announced major cuts to its capital spending and dividend in the wake of the sharp decline in oil prices.
Occidental said it will slash its 2020 capital spending from a range of $5.2 billion to $5.4 billion to a range of $3.5 billion to $3.7 billion. It will also cut its dividend, a major selling point for investors, from 79 cents per share to 11 cents per share.
Marathon Oil cuts capital spending by 30% YOY, suspends drilling activities
Marathon Oil is reducing its 2020 capital spending budget to $1.9 billion, representing a decrease of at least $500 million from the previous budget of $2.4 billion. The budget is about 30% lower than Marathon Oil's actual spending in 2019, according to a March 10 news release.
As part of the spending cut, Marathon Oil said it will hold off on all further resource play exploration drilling and leasing activity, suspend all operated drilling and completion activity in Oklahoma, reduce operated drilling and completion activity in the northern Delaware Basin, and optimize development programs in the Eagle Ford and Bakken shale regions.
Ovintiv to decrease near-term capital spending amid low oil prices
Ovintiv on March 9 said it is planning to decrease its near-term capital spending to maintain free cash neutrality amid the freefall in oil prices. "In addition to our liquidity, we have substantial operational flexibility and a track record of driving cost reductions across the business," Ovintiv CEO Doug Suttles said in a March 9 news release. Ovintiv was one of the companies most affected by the plunging oil prices. On March 9, shares of Ovintiv plunged 72.04% to close at $2.22.
Cenovus to cut 2020 capital spending by 32%, total production by 5%
Cenovus reduced its total capital investment for the year to a range of C$900 million to C$1.0 billion, from a previous range of C$1.3 billion to C$1.5 billion, according to a March 10 news release. The Calgary, Alberta-based producer also decided to suspend its crude-by-rail program and thus, will no longer use the government's special production allowance program.
Parsley lowers budget assumptions, reduces activity for 2020
Parsley Energy Inc. lowered its baseline capital budget assumption to a range of $30 to $35 West Texas Intermediate oil price for the rest of the year, from the previous $50 WTI oil price. Given the lowered WTI oil prices, Parsley said it will aim for at least $85 million of free cash flow, according to a March 9 news release. The company's previously anticipated free cash flow, with a $50 WTI oil price, was at least $200 million.
Riviera Resources to cut 2020 budget by $21M, postpone drilling program
Riviera Resources Inc. slashed its 2020 capital budget roughly $21 million by postponing the company's drilling program in the Ruston field of north Louisiana. Riviera expects the postponed drilling program to have minimal impacts on its 2020 production and EBITDA since the wells were originally expected to start up in the fourth quarter, according to a March 9 news release. The company had previously estimated 2020 capex at $52 million.
Diamondback Energy to cut production, 2020 budget due to low oil prices
Diamondback Energy is cutting production activity and its 2020 capital budget, starting with an immediate reduction of the company's completion crews to six from nine. The oil and gas producer had already dropped one completion crew as part of its initial 2020 plan. Diamondback is also planning to cut two drilling rigs in April and one more in the second quarter. Diamondback will retain lower activity levels until commodity prices recover, CEO Travis Stice said.
