Hess Corp, a U.S. oil company with operations in North Dakota’s Bakken Shale, said on Tuesday that it planned to cut capital spending by 40 percent this year because of the sharp downturn in crude prices. The New York-based company said it expected to spend $2.4 billion in 2016, down from $4 billion in 2015.
“We have significantly decreased our 2016 capital and exploratory expenditures, and we plan to reduce activity at all of our producing assets,” Chief Operating Officer Greg Hill said in a statement. Crude prices are lingering around $30 per barrel, a level where many oil and gas producers cannot profitably operate, according to numerous analysts. In response, most are expected to take a knife to budgets this year, following last year’s capital spending cuts that ranged from about 20 percent to 50 percent.
Hess will continue to invest in growth projects, Hill said. The company forecast average 2016 production at between 330,000 and 350,000 barrels of oil equivalent per day, unchanged from the outlook it provided in October. Hess is slated to report fourth-quarter earnings on Wednesday.
Shares of Hess, which have fallen 51 percent in the last year, were up 4 percent at $35.75 in morning New York Stock Exchange trading.