Marathon Oil Plans ‘Frac Holidays’ to Cut 2020 Spending
(Bloomberg) -- Marathon Oil Corp. is reducing its capital spending this year to about half of 2019 levels, joining a parade of shale drillers doing the same with oil prices trading at depressed levels as demand suffers due to coronavirus.
Capital expenditures in 2020 are now seen at $1.3 billion, a cumulative budget reduction of $1.1 billion from initial capital spending guidance for the year, according to a statement by the Houston-based company on Wednesday. Marathon joins drillers including EOG Resources Inc. and Murphy Oil Corp. and oil majors Exxon Mobil Corp. and Chevron Corp. in slashing budgets in response to U.S. crude oil trading in the $20-a-barrel range, down more than 50% since the start of the year.
Marathon plans to take “frac holidays in both the Bakken and Eagle Ford” during the second quarter, Marathon Oil CEO Lee Tillman said in the statement.
Marathon Oil previously said it would suspend its activities in Oklahoma. It also plans to suspend further drilling in the northern Delaware section of the Permian basin, with only a limited number of wells to sales expected through the rest of the year.
Marathon will continue to optimize development plans in the Bakken and Eagle Ford, before moving to a lower and more continuous drilling and completion program over the second half of the year in both basins.
“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,” Tillman said.
Marathon shares rose 4.1% to $3.83 at 9:37 a.m in New York trading on Wednesday.
©2020 Bloomberg L.P.