Not only is Marathon Oil Corp. planning to suspend any further drilling activity in Oklahoma, the company announced this week more cuts to its 2020 capital expenditures budget, trimming spending to $1.3 billion.
The deeper cuts come a month after the company announced plans to trim spending to $1.9 billion. Marathon also indicated it intends to adopt “frac holidays” in the Bakken and Eagle Ford basins in the second quarter of the year. The company’s 2020 capital spending is now expected to be approximately 50% below actual capital spending in 2019.
The company also said it plans to suspend further drilling activity in the North Delaware, in addition to previously announced actions to fully suspend Resource Play Exploration (REx) and Oklahoma activity.
“In light of extreme commodity price weakness and anticipated ongoing demand impacts, we have dramatically reduced activity in REx, Oklahoma and the Northern Delaware, and plan to take frac holidays in both the Bakken and Eagle Ford during second quarter. We’re maintaining our returns-first mindset with a focus on preserving value through the cycle,” said Marathon Oil Chairman, President, and CEO Lee Tillman.
“We currently expect to transition to a more continuous but lower level of activity in both the Bakken and Eagle Ford during the second half of the year. Against a highly volatile and uncertain environment, these decisive actions are designed first and foremost to protect our balance sheet and our hard earned financial strength.”
Marathon’s stock surged Wednesday in premarket trading after closing Tuesday 18% above its April 1 record low of $3.12. The value of shares plunged 72.3% over the past three months.
Source: Marathon Oil