Marathon Oil Corp. is set to suspend activity in the Permian Basin as part of spending cuts that mark the second reduction to the company’s capex in a month.

In an April 8 company release, Marathon said it now expects to spend $1.3 billion in 2020. The new spending target, which was revised in response to the continued collapse of both oil prices and demand, is $1.1 billion lower than what was originally forecast for the year and $600 million below what the company had estimated in March.

As a result of the reduction, Marathon now plans to fully suspend further drilling activity on its Permian position in the Northern Delaware Basin with only a limited number of wells producing through the rest of the year. Previously, the company had only planned to suspend all activity in Oklahoma, which was set to focus in the SCOOP shale play.

Marathon will continue work to optimize its development in the Bakken and Eagle Ford Shale, but now plans to take “frac holidays” in both plays during the second quarter, according to CEO Lee Tillman.

“We believe our high quality, multibasin portfolio affords us ample flexibility to swiftly and appropriately respond to changing market conditions, and we currently expect to transition to a more continuous but lower level of activity in both the Bakken and Eagle Ford during the second half of the year,” Tillman said in a statement.

Marathon also provided a hedging update on April 8, with new and restructured hedges designed to protect near-term crude oil downside and basis differentials.

According to analysts with Tudor, Pickering, Holt & Co. (TPH), the new and restructured hedges for the second quarter are a combination of fixed swaps and two-way collars totaling 100,000 bbl/d in total with a $30.73-32.89/bbl WTI floor.

Previously, Marathon’s second-quarter hedges consisted of 80,000 bbl/d via three-way collars with a $48/bbl WTI second floor, which is still the case for second-half 2020 hedges, the TPH analysts wrote in an April 8 research note.

“While we’re fans of the additional cut to capital and restructuring of swaps to establish a ‘hard floor’ in second-quarter, additional cuts could be needed to preserve the balance sheet if second-half 2020 price weakness holds, with wide local diffs [especially in the Bakken] potentially pressuring shut-in economics as well,” TPH analysts said.