Amidst worldwide falling crude oil prices, Murphy Oil Corp. has further reduced its capital expenditures for 2020.
In March, the El Dorado-based oil and gas exploration company dropped its cap ex plans by nearly $500 million. On Wednesday (April 1), company lowered its plans to invest in exploration from $950 million to $780 million. Initially, Murphy Oil planned to spend $1.45 billion in capital investments.
Murphy’s board of directors also cut its quarterly dividend in half from 25 cents per share to 12.5 cents per share.
“Murphy recognizes the reality of the current situation in the commodity markets, and we believe the reduction in dividends, capital expenditures, salaries and retainers are prudent steps to sustain the company for the long term,” said Claiborne Deming, Chairman of the Board for Murphy Oil Corp. “We will continue to review our dividend and other items throughout the course of the year and make further adjustments if warranted.”
Concurrently, the board approved significant salary reductions for company executives. The president and chief executive officer’s annual salary has been reduced by 35%, while remaining executives received salary reductions of as much as 30% with an average of 22%, the company said. These changes are effective April 1, 2020.
Cash retainers for all board directors were lowered by 35% with the chairman reducing his retainer by 70%.
Crude oil prices have been falling for months as a glutton of supply circulates in the world markets. West Texas Intermediate crude oil closed trading on Wednesday at $20.71 a barrel.
Oil prices came under additional pressure Wednesday after the U.S. Energy Information Administration reported domestic oil stockpiles more than tripled expected increases to 13.8 million barrels.