March 10, 2020 / 11:39 AM / 23 days ago

UPDATE 1-Marathon Oil cuts spending by about 30% as crude prices slump

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March 10 (Reuters) - Marathon Oil Corp said on Tuesday it has scaled back drilling activity and cut spending by at least 30% from a year earlier, joining other shale oil producers in paring back day-to-day operations as oil prices tumble.

Crude prices suffered their biggest one-day rout since the 1991 Gulf War on Monday, as top oil producers Saudi Arabia and Russia began a price war that threatens to overwhelm global oil markets with supply.

Diamondback Energy Inc and Parsley Energy Inc , two of the largest shale independents, on Monday cut drilling to maintain cash flow above ongoing expenses. Parsley said it would cut its drilling rigs to 12 from 15 as soon as possible.

Marathon said it was reducing its 2020 capital to $1.9 billion, $500 million less than its 2019 spending.

"In response to the recent commodity price volatility from simultaneous supply and demand shocks, we're taking swift and decisive action to defend our cash flow generation, protect our balance sheet, and fund our dividend," said Chief Executive Officer Lee Tillman.

The company said it has suspended all its operated drilling and completion activity in Oklahoma, where it is currently running three rigs and one frac crew. In Northern Delaware basin, Marathon is cutting on drilling activity. (Reporting by Arunima Kumar in Bengaluru; Editing by Shinjini Ganguli)

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