ConocoPhillips has announced it’s cutting its operational capital expenditure by $700 million this year in response to the recent oil market downturn, Kallanish Energy reports.
It is joining other E&P firms around the world that are cutting back due to the coronavirus and historically low crude oil prices. The move represents a 10% reduction from the previous guidance of $6.5 billion to $6.7 billion for 2020. This will be achieved by slowing operated activity in the Lower 48 and in reducing non-operated activity in the Lower 48.
There will also be deferred drilling in Alaska, the Texas-based company said in a statement on Wednesday.
Those cuts are expected to reduce 2020 full-year production by about 20,000 barrels of oil equivalent per day, it said. The company is also reducing its stock buyback program from $750 million to $250 million in second quarter 2020, it said. That will reduce the stock buyback by $1.5 billion in the rest of 2020.
“Today’s circumstances require action and we believe we’re taking the right steps at the right time,” said chairman and CEO Ryan Lance. “Our industry is clearly experiencing an unprecedented event brought about by simultaneous supply and demand shocks. The actions we are now taking reflect an acknowledgement to current events as well as the uncertainty around the timing and path of a recovery.”
Additional cuts are possible, Conoco added.
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