On Wednesday, Freeport-McMoRan Inc. (NYSE: FCX) said it now plans to spend $1.6 billion on oil and gas capital investments for 2016, down from a previous estimate of $2.0 billion. For 2017, the mining company and oil and gas producer has now set capital expenditures (capex) for oil and gas spending at $1.2 billion, also down from a prior estimate of $2.0 billion.
But while capex declines in Freeport’s oil and gas division, production is expected to rise and production costs are expected to fall. The company expects production costs to drop from $19 per barrel of oil equivalent to less than $16 in both 2016 and 2017. The company said that if Brent is priced at $45 a barrel Freeport “would substantially fund its capital expenditures” from its oil and gas cash flows.
After markets closed on Wednesday, Chevron Corp. (NYSE: CVX) announced that its capital budget for 2016 will decline by 24% compared with the company’s expected 2015 capital spending. The company’s planned $26.6 billion in 2016 capex includes $4.5 billion in spending by affiliated companies. The majority ($18.6 billion) of Chevron’s capital spending is targeted for international upstream projects. U.S. upstream projects are expected to get $5.4 billion in capital support, and the company’s global downstream spending is targeted for $2.2 billion, of which $1.6 billion is expected to be spent on U.S. operations.
On Thursday, ConocoPhillips (NYSE: COP) said that its capital spending budget for 2016 will total $7.7 billion, a 55% cut compared with expected 2015 capital spending of $10.2 billion. The company said the reductions will come primarily from lower major project spending, deflation capture and efficiency improvements. Capex for 2016 capital is allocated with approximately $1.2 billion (16%) to base maintenance and corporate expenditures, $3 billion (39%) to development drilling programs, $2.1 billion (27%) to major projects and $1.4 billion (18%) to exploration and appraisal.
Even though Conoco’s planned capital spending is expected to be much lower next year, production is expected to rise by 1% to 3%, excluding the impact of divestments.
Freeport-McMoRan stock traded 3.5% higher shortly before noon on Thursday, at $7.23 in a 52-week range of $6.63 to $23.97.
Chevron shares traded up 2.5%, at $89.80 in a 52-week range of $69.58 to $114.45.
Conoco’s share traded higher by 2.5% as well, at $49.66 in a 52-week range of $41.10 to $71.37.
The Average American Is Losing Their Savings Every Day (Sponsor)
If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4% today, and inflation is much higher. Checking accounts are even worse.
Every day you don’t move to a high-yield savings account that beats inflation, you lose more and more value.
But there is good news. To win qualified customers, some accounts are paying 9-10x this national average. That’s an incredible way to keep your money safe, and get paid at the same time. Our top pick for high yield savings accounts includes other one time cash bonuses, and is FDIC insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes and your money could be working for you.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
