Murphy Oil to Delay Some Gulf of Mexico Wells
Murphy Oil Corp. has reevaluated its 2020 budget and reduced it by $500 million to $950 million. The reduction is a 35 percent revision from the midpoint of the previous budget of $1.4- to $1.5 billion.
“Under current conditions, we believe this capital reduction program allows for financial flexibility and preservation of our longstanding dividend," stated Roger W. Jenkins, President and Chief Executive Officer. "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.”
The revised plan will be executed by:
- Delaying certain U.S. Gulf of Mexico projects and development wells
- Postponing spud timing of two operated exploration wells
- Releasing operated rigs and frac crews in the Eagle Ford Shale, with no operated activity planned for the second half of 2020
- Deferring well completions in the Tupper Montney
Just a few weeks ago, the company extended its contract for Valaris plc’s DS-15 (Renaissance) drillship in the Gulf of Mexico.
“We have persevered through multiple commodity price cycles in our 70 years of corporate history, and want to provide reassurance that we are focused on a strategy that protects the business, the balance sheet and our liquidity, while maintaining optionality for additional adjustments given the unstable environment.”
Jenkins added that the company has strong liquidity position as of year-end 2019 between its undrawn $1.6 billion senior unsecured credit facility due November 2023 plus cash on hand, along with other sources of liquidity arising in the normal course of business. Murphy also has no debt maturities until June 2022.
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