Equinor halts US onshore drilling, trims 2020 spend by $3 billion

Equinor is halting US onshore drilling and completions as part of a plan to cuts its 2020 spending by $3 billion. The company is reducing 2020 capex by roughly 20% to $8.5 billion from $10-11 billion. The company also cut exploration spending by $400 million to $1 billion and operating costs by around $700 million.

Equinor has been developing and producing onshore oil and gas in the US since 2008. Its portfolio is focused on the Bakken play in North Dakota and the Marcellus-Utica formations in the Appalachian basin. Equinor’s onshore US production of 321,000 boe/d includes Eagle Ford shale assets sold to Repsol in late 2019 (OGJ Online, Nov. 8, 2019).

The company says the spending changes will allow it to be organic cash flow neutral before capital distribution at an oil price of $25/bbl for the balance of the year. In 2014 Equinor said it needed an average oil price of around $100/bbl to be organic cash flow neutral before capital distribution.

These cost reductions come in addition to Equinor’s already announced suspension of its $5-billion, 4-year stock buy-back program.