Equinor has halted all its U.S. onshore activities as part of its $3 billion “action plan” to strengthen its resilience amid current market conditions, Kallanish Energy reports.
The Norwegian oil major disclosed the measures on Tuesday, following a statement earlier in the month announcing the suspension of its buyback program.
The updated 2020 outlook includes a 20% reduction in organic capex to $8.5 billion, compared with $10-11 billion previously planned; cuts in operating costs of around $750 million; and reduction of exploration spending to roughly $1 billion, down from $1.4 billion.
The cuts in organic capex will be achieved through “strict prioritization” after a review of cost and schedule flexibility of sanctioned and planned projects.
“Within U.S. onshore activities, drilling and completion activities are being halted to produce the volumes at a later period, reducing investments significantly for 2020,” the company said in a statement.
CEO Eldar Sætre highlighted the company is in strong financial position to handle the market volatility and uncertainty. “Our strategy remains firm, and we are now taking actions to further strengthen our resilience in this situation with the spread of the coronavirus and low commodity prices,” he said.
Thanks to the changes, Equinor said it now can breakeven with oil prices at $25 a barrel for the remaining part of the year. In 2014, the company needed oil at $100/Bbl to be organic cash flow neutral before capital distribution.
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