Insight
Will US$20 billion of spending cuts protect shale companies?
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Budgets have fallen fast for shale players. For the 31 companies we cover in detail, 2020 spending will be down at least 30%. But with prices well below breakevens and differentials adding even more challenges, why aren’t budgets down more? The answer is both simple and complex, depending on the company. But one area that’s clearly playing a role is hedging. These contracts are helping over half the companies we cover survive 2020. The outlook for 2021 isn’t as positive though. What are answers to the five key questions surrounding Lower 48 capex cuts and benchmarking corporate finances?
Table of contents
- Executive summary
- 1. What trends are coming out of updated company guidance?
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2. Are the changes just to drilling programmes?
- Dividends
- G&A
- 3. Why aren’t the cuts deeper?
- 4. What is the expected impact on production?
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5. Are the cuts enough to meet cash flow targets?
- So, what’s next for tight oil operators?
Tables and charts
This report includes the following images and tables:
- Company guidance: L48 upstream capex cuts relative to 2020 initial guidance
- Benchmark: hedging windfall for 2020
- WM outlook: L48 production cuts relative to 2020 initial guidance
- WM outlook: 2020 net corporate cash flow
- WM outlook: 2020 corporate cash flow breakdown
- Benchmark: dividend disbursements for 2020
- Benchmark: G&A costs per boe
What's included
This report contains:
