(Bloomberg) — Texas shale-oil company Matador Resources Co. plans to drop one of its nine drilling rigs by the middle of the year in response to plunging crude prices.
The move will slice $100 million from Matador’s planned capital expenditures for the year, according to a statement Wednesday. Matador is the first significant shale company to announce it’s cutting back on drilling since crude futures began nosediving earlier this month.
“Matador expects to continue to monitor market conditions and has the flexibility to add back the ninth drilling rig or drop additional drilling rigs in 2025 depending on market volatility and the macroeconomic environment,” the company said in the statement.
Oil prices have declined more than 13% in three weeks since US President Donald Trump launched his trade war and OPEC and its allies announced plans to beef up a production increase planned for later this year.
West Texas Intermediate settled just about $62 a barrel on Wednesday, below the $65 threshold that many shale companies need to break even on a new well.
Shares of Matador, which reported first-quarter results Wednesday that beat analysts’ expectations, rose as much as 4% after the close of regular trading in New York.
This article was originally posted at www.worldoil.com
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