Houston exploration and production company Marathon Oil on Tuesday said it is cutting its 2020 drilling budget by 20 percent, a day after oil prices collapsed to almost $30 per barrel.
In reducing planned capital spending to $1.9 billion from $2.4 billion, Marathon said it would spend $1.7 billion on drilling, hydraulic fracturing and other activities in the field, while $200 million would be used for exploration and to secure new oil leases.
“In response to the recent commodity price volatility from simultaneous supply and demand shocks, we’re taking swift and decisive action to defend our cash flow generation, protect our balance sheet, and fund our dividend,” Marathon Oil CEO Lee Tillman said in a statement.
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Marathon reported a $480 million profit in 2019, 56 percent less than the $1.1 billion it made in 2018, and revenue of $5.2 billion, 21 percent less than the $6.6 billion it reported a year earlier.
The company is suspending drilling and completion in Oklahoma, reducing its presence in the Permian Basin to four drilling rigs and one hydraulic fracturing crew, and tightening operations in the Eagle Ford and Bakken, where it has a combined eight drilling rigs and three hydraulic fracturing crews.
