Continental Resources Inc. said April 7 it would suspend its quarterly dividend and cut production as global oil markets continue to be impacted by the coronavirus pandemic.
The decision follows a roughly 55% reduction to Continental’s budget for 2020 that the company announced last month. The move is similar to those made by other U.S. shale producers following the oil market crash driven by a slump in demand due to the outbreak of COVID-19 and a price war between Saudi Arabia and Russia. Fellow U.S.-based independents Apache Corp. and Occidental Petroleum Corp. have also announced dividend cuts.
With global crude oil and product demand estimated to have been impacted by 30% due to COVID-19, Continental CEO Bill Berry said the company will continue “to take decisive action to maximize cash flow generation, accomplish cost savings initiatives and prioritize the strength of our balance sheet.”
Berry, who became Continental CEO in January after founder Harold Hamm stepped into a new role, added that the company will also reduce its production for April and May by about 30%.
Continental, which operates in the Bakken play of North Dakota and Montana as well as Oklahoma’s Scoop and Stack plays, had previously expected a reduction of less than 5% from its full-year production.
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