W&T Offshore, Inc. (WTI - Free Report) recently revised its 2020 capital budget downward in the wake of a weak crude pricing scenario.
The company’s revised capital budget for this year has been projected in the range of $15 million to $25 million. In comparison, W&T Offshore’s earlier guidance for capital and exploratory spending in 2020 was considerably higher at $50 million to $100 million. With oil price is now in the bearish category, since the coronavirus pandemic is hurting global energy demand, the outlook for exploration and production business seems gloomy. Thus, upstream energy players are restricting their operational activities and thereby reducing capital budget. Other energy firms that followed suit are Cimarex Energy Co. (XEC - Free Report) , Pioneer Natural Resources Company (PXD - Free Report) and EOG Resources Inc. (EOG - Free Report) .
Despite the capital spending reduction, the company expects to maintain its production guidance for 2020 at the band of 47,100 to 52,100 barrels of oil equivalent per day. Importantly, W&T Offshore expects to continue to generate positive cash flow at the mid-point of its 2020 revised capital budget. The company added that the cashflow projection will remain valid if prices of oil and natural gas lie at or more than $25 per barrel and $1.5 per Mcf, respectively.
Moreover, to strengthen its financials, W&T Offshore is looking for opportunities to bring down its operating and G&A expenses.
Headquartered in Houston, TX, W&T Offshore currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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