By Rachel Adams-Heard and David Wethe
The Oklahoma City-based company, which doesn’t typically hedge its production, withdrew its 2020 guidance and is dropping rigs, the driller said Monday in its first-quarter earnings statement. Continental also reported a $1.13 billion draw on its credit facilities and bought back 8.1 million shares of common stock in the quarter, according to a regulatory filing.
As crude prices remain depressed, oil producers are moving beyond laying down rigs and taking the once-rare step of scaling back existing output. Continental initially had plans to cut output by 30% to mirror the collapse in demand caused by the Covid-19 pandemic but has since doubled down on those efforts.
Callon Petroleum Co. said Monday it expects to shut in more than 3,000 barrels a day of output in May and is evaluating what to do with June production. The shale explorer also shut down all of its frack work as of last month and is cutting drilling down to just one rig by the middle of this month.
With the assumption that it will start to frack its wells again sometime in the second half of the year, Callon said it’s planning to spend no more than $325 million over the final three quarters of 2020.
EOG Resources Inc., the world’s second-largest independent oil explorer by market value, said last week that it’s curtailing about one-fourth of its production and canceling almost 40% of new wells it had planned to bring online this year.