US oil major, Chevron Corporation has again reduced its capex guidance to protect dividend, warning that its financial results would continue to be depressed as long as oil prices stay low.
The slash in Capex is coming at a time when Brent, the international oil price benchmark is nearing $30 per barrel, trading at $26.49(3pm) per barrel yesterday up from last Thursday’s price of $25.61.
Chevron said in its Q1 earnings report that it is further reducing its 2020 capital expenditure (capex) guidance by up to $2 billion to $14 billion.
In March, Chevron had already slashed capital expenditures, especially in the Permian, and said it was suspending its share buyback program.
Chevron announced in March a cut to its 2020 capital spending plan by $4 billion, or by 20 percent, to $16 billion, to protect its dividend and balance sheet in one of the worst oil price routs in recent memory.
Of the $4-billion initial capex cut, Chevron will slash $2 billion across upstream unconventionals, primarily in the Permian Basin.
On the Q1 earnings front, Chevron reported on Friday sales and other operating revenues at $30 billion, down from $34 billion for Q1 2019.
Earnings rose to $3.6 billion, from $2.6 billion for Q1 last year, but this past quarter’s earnings were favorably impacted by a gain of $240 million from the sale of upstream assets in the Philippines, favorable tax items of $440 million in international upstream, and foreign currency effects which increased earnings by $514 million.