Layoffs, furloughs, and spending cuts: We’re tracking how oil giants from Exxon to Halliburton are responding to the historic price shock

Oil and gas companies are slashing their 2020 budgets and letting staff go in response to the recent oil price shock. Here, a flare burns off gas from a gas plant near Wink, Texas U.S. Nick Oxford/Reuters This story is available exclusively on Business Insider Prime. Join BI Prime and start reading now. The novel…

Layoffs, furloughs, and spending cuts: We’re tracking how oil giants from Exxon to Halliburton are responding to the historic price shock

Oil and gas companies are slashing their 2020 budgets and letting staff go in response to the recent oil price shock. Here, a flare burns off gas from a gas plant near Wink, Texas U.S.

Nick Oxford/Reuters

This story is available exclusively on Business Insider Prime.
Join BI Prime and start reading now.

The novel coronavirus continues to cripple the global demand for oil, driving down the price to 17-year lows.Oil companies are among those that will be hurt the most. The breakeven oil price for an average company’s cash flow is $25, about where the US benchmark has hovered this week. Many oil and gas giants have already slashed capital spending, laid off or furloughed staff, and changed their production targets.Business Insider is tracking how top companies are responding to the oil price shock and will update this story as news breaks. Visit Business Insider’s homepage for more stories.

“Cheap oil has killed nearly 200,000 US jobs.” That was a CNN headline four years ago — the last time oil prices tanked, falling from over $100 in 2014 to just over $30 in 2016. Though the forces at play today are unprecedented, the trend for oil is similar.Since the start of the year, the price of Brent crude has fallen by about 60%,  from more than $60 to under $30 a barrel earlier this month, in response to a shock in demand and a price war playing out between Saudi Arabia and Russia. And Wall Street analysts are now predicting it could get much worse, as demand continues to crater in the wake of the coronavirus pandemic. 

“We expect a further sharp sell-off in oil prices in coming weeks,” Goldman Sachs said in a note published on Wednesday. “Such a hit on production will not be reversed quickly.” The virus is crippling businesses almost across the board, but the oil industry — home to many of the world’s largest companies — is reeling from one of the biggest blows.For the average company, the breakeven price for free cash flow is $25 a barrel, according to the research firm Rystad Energy, and the US benchmark, WTI, has been at or below that since March 18.In response, several oil and gas companies like Apache and Halliburton are trimming or furloughing staff, while nearly all of them have slashed their capital spending by more than 10%. Click here to subscribe to Power Line, Business Insider’s weekly energy newsletter.

“I knew it was part of what I signed up for,” said a former employee of oil and gas exploration company Apache who was laid off last Thursday. “I knew there were past downturns, and I knew it was going to happen again.” In fact, more than a million oilfield service jobs are likely to be cut this year, according to Rystad Energy. Business Insider is keeping track of how top oil and gas companies are responding to the price collapse. Companies are listed below in order from smallest to largest market capitalization as of Thursday night. Have you or an acquaintance been laid off by an oil company? Please contact us at energy@businessinsider.com or through the secure message app Signal at (646) 768-1657. 

Whiting Petroleum — $87 million

A drill of Whiting Petroleum in Stanley, North Dakota

Germain MOYON/AFP via Getty Images

What it is: An oil and gas exploration and production company with large projects in North Dakota and Colorado. Employment changes: “Whiting expects to drop one rig and one completion crew within the next month,” the company said in a public statement released on March 16.Spending cuts: The company said it’s slashing its capital budget by 30%, down to $400 million to $435 million, for 2020. Production cuts: “The capital reduction is projected to have a moderate impact on full-year 2020 total production and oil production,” the company said, though it didn’t specify what that means in barrels. 

Apache — $2.2 billion

A rig contracted by the oil and gas exploration company Apache

Terry Wade/Reuters

What it is: A large oil and gas exploration and production company, headquartered in Houston, Texas. Employment changes: Apache is planning to lay off 85 people in Midland, Texas, state filings show. “We are lowering our Permian rig count to zero and focusing capital elsewhere in our portfolio and, as a result, have made the difficult decision to further reduce staff,” Apache said in a statement. “We are working to support affected employees.”Spending cuts: Apache is planning to reduce its 2020 capital investment by as much $900,000, down to $1 billion to $1.2 billion, the company said in a public statement. The oil and gas exploration company is also slashing its dividend payments — from $0.25 to $0.025 per share. “The company will use the $340 million of cash retained annually from the dividend reduction to further strengthen its financial position.”Have you or an acquaintance been laid off by an oil company? Please contact us at energy@businessinsider.com or through the secure message app Signal at (646) 768-1657. 

Continental Resources — $3.7 billion

Wikimedia Commons

What it is: An oil and gas exploration and production company, and the largest leaseholder in the Bakken oilfield of North Dakota and Montana. Employment changes: The company has not announced any layoffs or furloughs but it is shrinking its rig count, which could result in changes to its workforce.Spending cuts: The company said it would slash capital spending by more than 50%, down to $1.2 billion from an original planned $2.7 billion. Production cuts: Continental is shrinking its rig count from nine to three in the Bakken Oilfield in the northern US, and from 10.5 to four in Oklahoma, it said in a public statement. 

Diamondback Energy — $4.1 billion

Travis Stice, the CEO of Diamondback Energy

Nick Oxford/Reuters

What it is: An oil and gas exploration and production company operating in the Permian Basin. Employment changes: No layoffs or furloughs have been reported so far, but earlier this month the company said that it’s “reducing activity immediately from nine completion crews to six and expects to drop two drilling rigs in April 2020 and a third later in the second quarter of 2020.”Spending cuts: Diamondback is cutting its 2020 capital budget by $1.2 billion, down to between $1.5 billion and $1.9 billion, and it’s “prepared to decrease its budget further should commodity prices remain weak,” the company said in a public statement. Production cuts: The company expects production to decline through the end of the year, with “full-year oil production lower than fourth quarter 2019 oil production of 195,000 barrels per day.”

Halliburton — $6.2 billion

The oilfield services company Halliburto
Read More From Publisher