Two of the leading producer of shale oil in the US reduced costs

Moscow. January 27. Two companies that are among the largest producers of shale oil in the US, announced the reduction of investments because of the collapse in oil prices and revised forecasts of oil and gas decline. According to Financial Times, American oil companies faced a shortage of funding, the impact on oil production in the U.S. has increased.

Continental Resources of Oklahoma intends to cut capital expenditure by 66% in 2016 to us $920 million last year costs were reduced by 46%.

Based in new York, Hess Corp. reduce costs this year by 40% after reduction of 29% a year earlier.

Top executives of both companies talk about the need to reduce activity and future savings.

This year Continental and Hess – the first American Corporation the fuel and energy complex, officially reported on the reduction of costs. However, experts expect that the number of these ads will grow.

Since the second half of 2015 medium and small oil and gas companies in the US lost a significant number of opportunities of access to external financing in the equity markets and debt capital. The cost of drilling and well completions in the U.S. declined (in some regions up to 40%), but still not as much as the price of oil, fell last week to the lowest level since 2003.

And Continental and Hess say they were forced to reduce production. Continental expects to reduce production by 5-9% in comparison with the year 2015 – up to 200 thousand barrels of oil equivalent a day (b.N. e./C). Hess estimates the volume of production in current year in thousand b 330-350.N. e./with, i.e. 7-12% less than the average for the first 9 months of 2015.

In 2015, Continental production has increased to 24-26%, Hess – at 19% (data for January-September).

In General, the experts expect that the US will reduce oil production by the end of 2016 by 12% (1.2 million b/d) since the last peak recorded in April of 2015.