(Reuters) – Noble Energy Inc said on Friday it would curtail oil production by at least 40,000 barrels per day in May and June and further cut its capital spending to cope with a plunge in oil prices, amid reduced demand and oversupply due to the COVID-19 pandemic.
Stay-at-home orders designed to contain the spread of the coronavirus have forced businesses to shut down, cutting worldwide demand for oil and creating a supply glut. U.S. crude collapsed this year, and is down about 60% from January despite a recent rally.
Noble said it will curtail 5,000 barrels per day (bpd)-10,000 bpd in May and 30,000 bpd-40,000 bpd in June from the company’s U.S. onshore assets.
North American oil companies are on course to cut roughly 1.7 million barrels per day by the end of June, according to a Reuters analysis of U.S. state and company data.
The company took about $4 billion in charges from assets and leadhold impairments due to the fall in commodity price.
Noble also said it would further cut its capital spending by $50 million, bringing the total reduction to 53% from the midpoint of its original budget of $1.6 billion to $1.8 billion.
Shares of the company were up 5% at $9.33 in premarket trading after it beat estimates on the back of higher crude oil sales.
On an adjusted basis, the company posted a profit of 18 cents per share, higher than analysts’ estimate of 3 cents per share, according to Refinitiv IBES.
Total sales volume rose around 16% to 390,000 barrels of oil equivalent per day from last year.
The Houston-based oil and gas producer’s net loss attributable to the company was $3.96 billion, or $8.27 per share, for the first quarter ended March 31, wider than a loss of $313 million, or 65 cents per share, a year earlier.
(Reporting by Arunima Kumar in Bengaluru; Editing by Krishna Chandra Eluri)