Another wave of U.S.-based oil and gas producers have recently unveiled capex cuts, following in the footsteps of many in the industry as companies adjust to the sharp drop in oil prices.

Global oil markets spiraled downward last week after a price war between Saudi Arabia and Russia broke out in the midst of already weakening demand due to the coronavirus outbreak. Since the launch of the price war, U.S. crude has dived 30% to about $29.

Many producers in the U.S. have responded to the slump in oil prices by slashing spending and pulling back on drilling plans for the year. On average, Reuters estimates North America oil and gas producers have cut their 2020 budgets by about 30% since the fall in oil prices, according to data compiled by Reuters.

Source: Reuters as of March 17

North American Producer’s Spending Reductions

 Company  2020 Revised Capex
(Midpoint; in $MM)
2020 Previous Capex
(Midpoint; in $MM)
 % change
EOG Resources Inc. $4,500 $6,500 -30.77%
Occidental Petroleum Corp. $3,600   $5,300   -32.08%
Hess Corp. $2,200 $3,000 -26.67%
Concho Resources Inc. $2,000 $2,700 -25.93%
Marathon Oil Corp.    $1,900   $2,400  -20.83%
Pioneer Natural Resources Co. $1,800 $3,300 -45.45%
Husky Energy Inc. $1,740 $2,390 -27.2%
Devon Energy Corp. $1,300 $1,800 -27.78%
Noble Energy Inc. $1,200 $1,700 -29.41%
EQT Corp. $1,125 $1,200 -6.25%
Apache Corp. $1,100 $1,750 -37.14%
Murphy Oil Corp. $950 $1,450 -34.48%
PDC Energy Inc. $814 $1,050 -22.48%
Callon Petroleum Co. $712.5 $975 -26.92%
Cenovus Energy Inc.  $690  $1,020  -32.35%
Seven Generation Energy Ltd. $635 $776 -18.17%
Crescent Point Inc. $539.61 $827.4 -34.78%
Whiting Petroleum Corp. $417.5 $602.5 -30.71%
Talos Energy Inc. $407.5 $532.5 -23.47%
Arc Resources Ltd. $217 $361 -39.89%
Birchcliff Energy Ltd.  $207 $254 -18.5%
Meg Energy Corp. $145 $182 -20.33%
Bonanza Creek Energy Inc. $90 $225 -60%
Gran Tierra Energy Inc. $70 $210 -66.67%
Pipestone Energy Ltd. $43 $108 -60.19%
W&T Offshore Inc. $20 $75 -73.33%
Gear Energy Ltd. $13 $50 -74%
TransGlobe Energy Corp.  $7.1 $37.1  -80.86%
Total $28,443.71 $40,776. -30.24%

Exxon Mobil Corp., one of the recent companies to announce reductions, pledged to make “significant” cuts to spending on March 16, but did not provide details. Rival oil major Chevron Corp. said last week it was looking for ways to trim spending.

Hess Corp., a partner of Exxon Mobil-operated Guyana projects, on March 17 reduced its capital and exploratory budget by $800 million to $2.2 billion. The company plans include cutting its six-rig program in the Bakken to one rig as it shifts focus to its Guyana assets.

In the Permian Basin, Concho Resources Inc. and Callon Petroleum Co. both announced on March 17 a roughly 25% reduction to 2020 capex. Callon, which also holds a position in the Eagle Ford Shale, said it plans to reduce its current operated rig count to five from nine before the end of second-quarter 2020 while shifting capital allocation to “high-return, shorter cash cycle projects.”


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Kosmos Energy Inc. also said March 17 it plans to cut spending by 30% and suspend its dividend in hopes of becoming cash flow neutral at $35 oil. The company, which is based in Dallas but trades on both the New York and London stock exchanges, has key assets offshore Ghana, Equatorial Guinea and U.S. Gulf of Mexico (GoM).

Another producer in the U.S. GoM, W&T Offshore Inc. on March 17 said it reduced its estimate of 2020 capex to $15 million to $25 million from its prior level of $50 million to $100 million though did not change its production guidance for the year.

Meanwhile, smaller U.S.-based producers, Penn Virginia Corp. and Abraxas Petroleum Corp. also responded to current market conditions.

On March 17, Penn Virginia, a pure-play Eagle Ford Shale company, said it had reduced its 2020 capital budget by about 30% and expects to have one active rig running in April through the remainder of the year. With positions in the Bakken and Delaware basins, Abraxas on March 16 said it suspended all drilling and completions while the current market conditions persist. The company also reduced its G&A expense by about 40% through a combination of salary reductions, reduction in board size and selective layoffs.

Reuters contributed to this report.