We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Ovintiv Trims Q2 Capex by $300M to Cope With Oil Price Plunge
Read MoreHide Full Article
The recent softness in the commodity prices compelled energy players to reanalyze their strategies as well as reconsider capex cuts. Notably, after conforming to the capital discipline during the crude downturn (from mid-2014 to 2016), energy companies again reckoned elevating their capital expenditure since 2017. However, a shrinkage in the commodity price convinced explorers and producers to take a relatively cautious approach to capex programs again this year. Instead of augmenting their capital outlays, the energy players are now finding it wiser to focus on adding shareholder value.
West Texas Intermediate began the year with a little more than $60 per barrel of oil. However, this uptrend was pretty short-lived with the commodity price tanking to multi-year lows to settle at $31.13 on Mar 9.
Reacting to this sudden oil price plunge, Ovintiv Inc. (OVV - Free Report) recently announced intentions to lower second-quarter 2020 capital investment projection by minimum $300 million. It further plans to trim current-year cash costs by $100 million. This will help the company maintain a solid financial position and secure free cash neutrality.
The measures adopted by Ovintiv for capex cuts will comprise abandoning of 10 operated drilling rigs instantly along with an aim to suspend an additional six operated rigs in May this year. Post these rig count cuts, Ovintiv will now be left with three functional rigs in the Permian, two in the Anadarko and two in the Montney.
Importantly, the company has no long-term commitments to accomplish and will steadily keep a vigil on the commodity price performance, adapting to the capital spending adjustment plans further in response to an unstable price scenario.
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Image: Bigstock
Ovintiv Trims Q2 Capex by $300M to Cope With Oil Price Plunge
The recent softness in the commodity prices compelled energy players to reanalyze their strategies as well as reconsider capex cuts. Notably, after conforming to the capital discipline during the crude downturn (from mid-2014 to 2016), energy companies again reckoned elevating their capital expenditure since 2017. However, a shrinkage in the commodity price convinced explorers and producers to take a relatively cautious approach to capex programs again this year. Instead of augmenting their capital outlays, the energy players are now finding it wiser to focus on adding shareholder value.
West Texas Intermediate began the year with a little more than $60 per barrel of oil. However, this uptrend was pretty short-lived with the commodity price tanking to multi-year lows to settle at $31.13 on Mar 9.
Ovintiv Inc. Price
Ovintiv Inc. price | Ovintiv Inc. Quote
Reacting to this sudden oil price plunge, Ovintiv Inc. (OVV - Free Report) recently announced intentions to lower second-quarter 2020 capital investment projection by minimum $300 million. It further plans to trim current-year cash costs by $100 million. This will help the company maintain a solid financial position and secure free cash neutrality.
The measures adopted by Ovintiv for capex cuts will comprise abandoning of 10 operated drilling rigs instantly along with an aim to suspend an additional six operated rigs in May this year. Post these rig count cuts, Ovintiv will now be left with three functional rigs in the Permian, two in the Anadarko and two in the Montney.
Importantly, the company has no long-term commitments to accomplish and will steadily keep a vigil on the commodity price performance, adapting to the capital spending adjustment plans further in response to an unstable price scenario.
Zacks Rank & Key Picks
Ovintiv has a Zacks Rank #4 (Sell).
Better-ranked players in the energy space include Oasis Petroleum Inc. , Earthstone Energy, Inc. and FTS International, Inc. , each carrying a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>