March 17, 2020 / 10:03 AM / 2 months ago

UPDATE 1-Kosmos to scrap dividend, cut spending to generate cash at $35 a barrel

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March 17 (Reuters) - Oil and gas producer Kosmos Energy suspended its dividend on Tuesday and said it was aiming to reduce 2020 capital spending by 30% to become cash flow neutral at an oil price of $35 a barrel.

Oil giants including the world's largest publicly traded oil company, Saudi Aramco, Chevron Corp and BP have outlined plans to cut spending after a plunge in prices sparked by a falling out between Saudi Arabia and Russia over output and the coronavirus pandemic.

Kosmos said it now plans to reduce its capital budget for the year to below $250 million from an earlier forecast range of $325 million to $375 million.

The company said it would suspend its dividend after the 2019 payout, which it expects to result of savings of $75 million a year.

A combination of these steps and cutting general and administrative costs by $60 million through job reductions and scrapping cash bonuses this year, Kosmos said it hopes to shave off $1 per barrel of oil equivalent produced.

Kosmos, which typically does not operate fields, expects its 2020 production to stay flat. (Reporting by Shanima A in Bengaluru and Shadia Nasralla in London; Editing by Shailesh Kuber and Alexander Smith)

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