Texas-based EOG Resources is cutting its 2020 capital spending by $2 billion or 31%, in the wake of the spreading coronavirus and the crude oil price war between Saudi Arabia and Russia that is impacting U.S. shale producers.
EOG said it intends to reduce activity across all of its operating areas and will focus its drilling in the Delaware Basin of West Texas and New Mexico and the Eagle Ford Shale in South Texas, Kallanish Energy reports.
It now plans to spend between $4.3 billion and $4.7 billion on capex in 2020.
It is also projecting flat year-over-year oil production from 2019 to 2020. It is projecting full-year 2020 oil production of 446,000 to 466,00 barrels of oil per day.
The company’s revised plan generates strong returns at $30-per-barrel crude oil, it said.
Net cash from operating activities is expected to fund both capital spending and dividend payments, assuming mid-$30 oil prices for the remainder of 2020, the company said.
“Our first priority is to generate high returns with every dollar we spend at low oil prices,” said William R. Thomas, chairman and CEO in a statement.
The company is “well positioned to weather the storms of low commodity prices,” he said.
