U.S. shale giants turn to 2016 with somber outlook
By Ernest Scheyder
WILLISTON, N.D., Sept 10 (Reuters) - Some of the largest U.S. shale oil producers have already begun slashing 2016 budgets, with some planning double-digit reductions starting next January, the latest sign low crude prices are forcing a radical adjustment in the industry.
A rash of bleak commentaries from CEOs this week marks one of the earliest times in a calendar year that oil producers have laid out rough sketches for the following year's spending.
Gone, for now at least, are the high-rolling ways of an industry that as recently as last year was flush with cash. Here to stay, it seems, is constant belt-tightening, though executives still think they will be able to pump more oil.
In all, North American oil companies should cut their budgets by as much as 15 percent next year, analysts at Barclays estimate.
"No cost is too small for us to scrutinize," Marathon Oil Corp Lee Tillman told the Barclays Energy Power Conference on Wednesday. "We continue to be laser-focused on reducing costs across all areas of our business."
Marathon, which operates in North Dakota and Texas, said it would trim at least 18 percent of its capital budget next year - more than $600 million - by cutting the number of wells it fracks, among other steps.
Executives at Anadarko Petroleum Corp and Apache Corp hinted strongly they could take cuts of their own.
"If we do stay in this lower-for-longer scenario, we're going to see (2016) become a very different period than we would have anticipated," Al Walker, Anadarko's CEO, said at the conference. Continued...