Due to the sharp decline in global commodity prices, Occidental Petroleum Corp., Houston, said it will reduce 2020 capital spending to $3.5-3.7 billion from its previously guided $5.2-5.4 billion and will implement additional operating and corporate cost reductions.
Previously, the company planned to allocate $2.2 billion to Permian Basin resources in 2020—down from $3.3 billion the year prior—with expected production growth in the region of 6%. Permian production guidance for the year was previously 465,000-475,000 boe/d. Total company production guidance for the year was previously 1.36–1.39 MMboe/d. A breakdown of the revised 2020 capital program by asset was not provided.
The company’s 2019 spending reached $6.3 billion, nearly 70% of which was allocated to US assets, mostly in the Permian Basin.
Vicki Hollub, Occidental’s president and chief executive officer, said the actions lower the company’s cash flow breakeven level to the low $30s WTI, excluding the benefit of its hedges.