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.
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.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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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.
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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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