EOG cuts capex 31%, predicts flat full-year production
EOG Resources Inc. cut its exploration and development expenditures for 2020 by 31% to $4.3-4.7 billion including facilities and gathering, processing, and other expenditures, and excluding acquisitions and non‐cash exchanges. The company expects net cash from operating activities to fund both capital expenditures and dividend payments assuming mid-$30/bbl oil prices for the remainder of 2020.
The revised capital plan supports full-year 2020 crude oil production of 446,000-466,000 b/d, roughly flat compared with full-year 2019 levels. Given current oil and natural prices, EOG will reduce activity across its operating areas, focusing on drilling in Delaware basin and South Texas Eagle Ford shale.
The company’s total crude oil volumes in fourth-quarter 2019 were 468,900 b/d, above the midpoint of its target range and an 8% increase compared with the same period in 2018.
EOG expected to complete 800 net wells in 2020 compared with 750 net wells in 2019, according to its 2019 earnings report, with activity focused in Delaware basin, Eagle Ford, and Rocky Mountain areas and a 2020 exploration and development budget of $6.3-6.7 billion. The original capital program supported growth in crude oil production of 10-14% in 2020 (OGJ Online, Mar. 2, 2020).
