Murphy Cuts 2020 Capex by 35%

New York-listed Murphy Oil Corporation March 12 said it has cut its capital spending plans by 35% for 2020 given current market conditions and recent commodity price volatility.

Murphy’s revised 2020 budget is about $950mn. “The reduction of approximately $500mn equates to a nearly 35% revision from the midpoint of the previously announced corporate budget of $1.4bn to $1.5bn,” the company said.

The company said it plans to delay certain US Gulf of Mexico projects and development wells; postpone spud timing of two operated exploration wells; release operated rigs and frac crews in the Eagle Ford Shale, with no operated activity planned for the second half of 2020; and defer well completions in the Tupper Montney.

“Under current conditions, we believe this capital reduction programme 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,” Murphy CEO, Roger Jenkins, said.

Murphy operates oil and gas projects in North America, South America, Australia, southeast Asia, and Mexico.

“Murphy has an ample liquidity position as of year-end 2019 between its undrawn $1.6bn senior unsecured credit facility due November 2023 plus cash on hand, along with other sources of liquidity arising in the normal course of business. Further, we have no debt maturities until June 2022,” said Jenkins.