Ovintiv Dropping 16 Rigs
Denver-based Ovintiv Inc. reported Thursday that it is immediately dropping 10 operated rigs and plans to drop another six operated rigs in May 2020.
Ovintiv revealed the operational changes in conjunction with an announcement that it intends to immediately cut $300 million from its second quarter 2020 capital investment program and $100 million from its full-year cash costs. The firm added the capital spending reduction represents a “first step” following the recent sharp decline in oil prices.
“We are moving quickly and decisively in response to these volatile and challenging times,” Ovintiv CEO Doug Suttles remarked in a written statement emailed to Rigzone. “It is imperative to take immediate action and we are dropping roughly two-thirds of our operated rigs and reducing our cash costs by $100 million. Market conditions are changing rapidly, and we have full operational flexibility to further adjust activity to maintain our balance sheet strength.”
According to Ovintiv, the rig count changes will leave the company with seven operated rigs in the U.S. and Canada:
- three in the Permian Basin
- two in the Anadarko Basin
- two in the Montney Formation.
Ovintiv also stated that it is prepared to reduce capital investments even further throughout the year.
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