In accordance with the revised budget, Murphy Oil will delay some of its US Gulf of Mexico projects apart from taking other measures
Murphy Oil has slashed his 2020 budget by nearly 35% or about $500m to nearly $950m citing the prevailing market conditions and the recent volatility in commodity price.
The US-based oil and gas company previously allocated a budget in the range of $1.4-1.5bn for the year 2020.
In order to execute a revised plan as per the reduced budget, Murphy Oil has outlined certain measures for which it expects to disclose further details at a later date.
The oil and gas company will delay some of its US Gulf of Mexico projects and drilling of certain development wells in the region. It will also defer the spudding of two operated exploration wells.
Murphy Oil said that it will not take up any activity in its operated assets in the Eagle Ford Shale during the second half of 2020. In this connection, the company will release operated rigs and frac crews in the region.
Current producing assets of Murphy Oil in the US
The company has been producing oil and natural gas from eight operated fields and three non-operated fields across the US. Seven of the producing fields are contained in the deepwater Gulf of Mexico, while the other one is in the Eagle Ford Shale in South Texas.
The oil and gas company has also decided to postpone well completions in the Tupper Montney tight gas resource play in British Columbia, Canada.
Murphy Oil president and CEO Roger Jenkins said: “Under current conditions, we believe this capital reduction program allows for financial flexibility and preservation of our longstanding dividend. As always, we will not sacrifice safety in our efforts to reduce costs across all our assets, as it remains a core value within Murphy.”
In a separate development, Canada-based Husky Energy has also reduced its 2020 budget by CAD1bn ($720m) amid challenging global market conditions. The revised capital investment for 2020 will be now in the range of CAD2.3-2.5bn ($1.65-1.8bn).
The company will cut down its upstream spending this year by CAD900m ($647.96m), while the remaining CAD100m ($72m) will be achieved through additional cost-saving measures.
Some of the notable measures to be taken up by Husky Energy to meet the revised budget include deferring the development of the Block 15/33 oil field offshore China by a year.