Marathon Oil Corp. on Wednesday became another upstream operator, which reduces 2020 capital spending due to collapsing global oil demand and prices. The company started 2020 with a capital expenditure of $2.4 billion. However, it was slashed by $500 million in early March and another $600 million on April 8.
As a result, Marathon’s capex is just $1.3 billion, about half of its planned amount. The latest reduction represents drilling halts in the Northern Delaware Basin in southeast New Mexico. Marathon noted that it would focus on the development plans in the Eagle Ford Shale in Texas and the Bakken Shale in North Dakota.
Marathon CEO Lee Tillman said that these moves are aimed to protect the company’s balance sheet. Marathon’s cash income will match its expenses if WTI prices reach a level of $40/barrel, Credit Suisse analyst Bill Featherston said. The analyst also expects that Marthon’s 2021 capex would stand at roughly $1 billion.
