U.S. producers Hess Corp, Concho Resources Inc and Callon Petroleum Co on Tuesday followed oil major Exxon Mobil Corp in cutting their spending for the year, as oil prices continued to trade below $30 a barrel.

Hess, Concho, Callon join Exxon in tightening budget amid oil crash- oil and gas 360

Source: Reuters

Oil producers are trying to shore up cash as a double-whammy from the Saudi-Russia price war and dwindling demand because of the coronavirus outbreak threatens to hold oil prices hostage for an uncertain period of time.

Prices fell below $30 per barrel on Tuesday, extending losses after shedding a tenth of their value on Monday, while most shale producers need oil prices at low $40s to make a profit.

In a major reversal from just a few weeks ago, oil major Exxon said on Monday it would make “significant” cuts to spending in the face of the price slide that has sent its shares to a 17-year low.

Chevron Corp earlier said it was looking at ways to trim spending that could lead to lower near-term oil production. It originally expected 2020 organic capital expenditure of $20 billion.

Hess, Concho and Callon slashed their 2020 capital budget by about a quarter while Callon said it would cut its rig count to five from nine before the end of the second quarter.

Hess also lowered its 2020 average production by 1.5% to between 325,000 barrels of oil equivalent per day (boepd) and 330,000 boepd, excluding Libya.

Kosmos Energy, listed on the London and New York Stock Exchange, on Tuesday suspended its dividend and said it was aiming to reduce 2020 capital spending by 30%.

Since last Monday, North American producers have slashed their spending by about 30% on average, according to data compiled by Reuters.

Reuters reported on Monday that Chesapeake Energy Corp, which once helped spearhead the U.S. shale revolution, had tapped debt restructuring advisers amid the rout in energy prices.

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