More US oil producers slash budgets
Analysts expect spending on exploration to fall about 30 per cent in North America, with rig counts declining more than 25 per cent.
Bengaluru - Latest cuts come on back of coronavirus outbreak crimping demand, price war between Saudi Arabia and Russia
Published: Thu 12 Mar 2020, 8:57 PM
Last updated: Thu 12 Mar 2020, 11:00 PM
Devon Energy, Apache and Murphy Oil on Thursday became the latest in a string of North American oil producers to slash their capital spending and drilling plans as crude prices tumble.
The latest cuts come as the coronavirus outbreak crimps demand and a price war between top producers Saudi Arabia and Russia threatens to flood the oil markets.
Apache slashed its dividend by about 90 per cent, cut 2020 capital investment plan by more than 37 per cent, and said it would stop producing in Texas' Permian basin and reduce drilling activity in Egypt and the UK North Sea.
Devon said it would cut its spending by about 30 per cent from its earlier forecast, while Murphy Oil slashed its budget by 35 per cent at the midpoint and said it would delay some US Gulf of Mexico projects and development wells.
Earlier this week, Occidental Petroleum announced it would slash its dividend and capital expenditure, while Chevron became the first oil major to say it was looking at ways to cut spending that could lead to lower near-term oil production.
US independent producer Marathon Oil and Canadian oil-sands company Cenovus Energy have also promised to cut spending by about 30 per cent from a year earlier.
Shale firms Diamondback Energy, Parsley Energy, Matador Resources, Canada's Meg Energy and offshore driller Talos Energy all unveiled plans to cut spending.
EOG Resources Inc said it was evaluating its drilling activity and that it was in the process of finalising specific plans.
Analysts at Evercore said this week that they expect global exploration and production budgets to fall nearly 16 per cent year-over-year, compared to their original forecast which called for a modest growth of 2 per cent.
They expect spending to fall about 30 per cent in North America, with rig counts declining more than 25 per cent.