HOUSTON, Jan. 8 (UPI) -- U.S. shale explorer Sanchez Energy said it's the latest to cut its capital plans for 2015 because of slumping oil prices.
"In response to the deteriorating commodity price environment, Sanchez Energy has elected to further reduce its 2015 capital plan to a range of $600 million to $650 million," President and Chief Executive Officer Tony Sanchez said in a statement.
The range is nearly 30 percent less than the capital plan announced in November, which the CEO said itself was less than the $1.15 billion envisioned before oil prices started their decline in June.
Several international energy companies have reduced their spending plans for the year in response to the bear market for crude oil. Oil prices have lost about half of their value since June.
Sanchez said the revised spending plan focuses the company's financial efforts on areas with strong rates of return. The capital plan moving forward is based on oil priced at $60 per barrel, about 15 percent more than the current price.
Most of the company's efforts will target the Eagle Ford shale play in Texas. Production for 2015 is expected to range between 40,000 and 44,000 barrels of oil equivalent per day, which the company said would be a 40 percent increase from last year if sustained.
Oil services company Baker Hughes said in its latest weekly report on rig activity that work in the Lower 48 was slowing down as oil prices continue their slump. Sanchez said its drilling plans for the year represent a 60 percent decline from fourth quarter 2014.
"We have asked all service vendors to reduce prices according to the changing commodity price environment," Sanchez said in his Wednesday statement. "Material reductions have been made and are ongoing in all operating cost segments."
