Devon Energy, Oklahoma City, has reduced its 2020 capital spending budget by $500 million to $1.3 billion. The 30% reduction compared to its previous 2020 capital plan is in response to the current commodity price environment, Devon said Mar. 12.
While the capital reductions will be spread across the company’s portfolio, the company expects to focus development activity in the Delaware Basin and Eagle Ford, with the most substantial cuts applied to the Powder River Basin and STACK assets.
In February, the company noted 30-day production rates of Powder River Basin Niobrara wells as high as 1,500 boe/d with oil representing more than 85% of the production mix during in 2019 and had previously planned to double its Niobrara drilling activity in 2020 in an attempt to ready a portion of the field for development in 2021.
In the STACK, the company formed a drilling partnership with Dow to develop a portion of the company’s acreage. The partnership was expected to begin drilling its initial development project in the second quarter of 2020.
Details about specific changes to Powder River Basin and STACK activity programs were not released, but the company said an update is expected with concurrent with its first-quarter reporting.
The company entered 2020 with $1.8 billion of cash and an undrawn credit facility of $3 billion. The company has no outstanding debt maturities occurring until the end of 2025.
Meantime, the company is expected to close on the sale of Barnett shale assets to Banpu Kalnin Ventures for $770 million on Apr. 15 (OGJ Online, Dec. 18, 2019).