ConocoPhillips will cut its 2020 capital expenditures plan by $700 million—a 10% decrease from the previously announced guidance—in response to the oil market downturn. The company plans to slow operated development activity in the Lower 48, decrease non-operated activity in the Lower 48, and defer drilling in Alaska. Reductions are expected to impact 2020 full-year production guidance by 20,000 boe/d.
The major previously reported 2020 operating plan capital guidance of $6.5-6.7 billion, which included funding for ongoing development drilling programs, major projects, exploration and appraisal activities, as well as base maintenance. The company’s 2020 production guidance was previously expected to be 1.23-1.27 million boe/d (OGJ Online, Feb. 5, 2020).
ConocoPhillips ended 2019 with over $14 billion of liquidity, including cash, cash equivalents, short-term investments and availability under its revolving credit facility, said Ryan Lance, chairman and chief executive officer. He said the company “will continue to monitor market conditions and consider various scenarios to inform any future actions,” and that the company is choosing to exercise only a portion of its flexibility at this time.
A full 2020 guidance update is expected in conjunction with first-quarter earnings on Apr. 30.