Yahoo Finance Here's What ConocoPhillips is Doing to Deal With Coronavirus
ConocoPhillips COP recently announced its decision to take some additional measures in the wake of the coronavirus pandemic.
The outbreak has drastically dented global energy demand, which has been compelling energy giants to slash capital budgets, curtail operations and suspend dividend payments and stock buybacks.
As part of further measures against its impact, ConocoPhillips has announced a new capital budget for 2020 of $4.3 billion, showing an additional reduction of $1.6 billion. Hence, as compared to the initial guidance, the upstream energy firm has slashed capital budget by a total of $2.3 billion. This also reflects a reduction of 35% from the original estimate. Energy players that also considered capital budget curtailments are Cimarex Energy Co. XEC, Pioneer Natural Resources Company PXD and EOG Resources Inc. EOG.
Triggered by lower capital spending, ConocoPhillips will reduce some production volumes. Until the coronavirus-affected energy market recovers, the company has planned for voluntary production volume reductions in Canada and the Lower 48 region. By May, the company is willing to lower volumes from Canada’s Surmont oil sands facility by 100,000 barrels per day (Bbl/D). Meanwhile, per the initial expectations, the upstream firm will lower production by 125,000 Bbl/D in the United States.
Notably, with the volume curtailment measures, the company’s net production will get lowered by 200,000 barrels of oil equivalent per day (BoE/D) in North America – contributing the maximum to the company’s worldwide output. Per Bloomberg, with the measure, the company’s volumes in the continent will get reduced by a massive 27%.
ConocoPhillips has also decided to cut 2020 planned operating expenses by an additional $600 million to $5.3 billion. Investors should also know that last month, ConocoPhillips decided to slow down the pace of its 2020 stock buy-back program. As part of its earlier decision, the company had announced that starting second quarter, the quarterly run rate of the program will be lowered to $250 million from the prior $750 million. But in response to the downturn in energy market, the company has now vouched to suspend its share repurchase program.
ConocoPhillips Price
ConocoPhillips price | ConocoPhillips Quote
Headquartered in Houston, TX, ConocoPhillips currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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ConocoPhillips (COP) : Free Stock Analysis Report
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