This article was first published at Seeking Alpha on
February 5, 2015
Earlier on Thursday, analysts at Citigroup downgraded
contract driller Helmerich & Payne (NYSE:HP) to sell citing concerns
related to weak pricing environment, low utilization and possibility of
contract cancellations.
The downgrade came after the 47% drop in Helmerich
& Payne stock since the beginning of the second half of 2014 which was
largely due to the significant decline in oil prices during this period to
multi-year lows.
As expected, the weak oil prices have prompted a majority of
oil and gas producers - such ConocoPhillips (NYSE:COP) and Marathon Oil
(NYSE:MRO) -- to make double-digit cuts to their capital expenditure plans for
2015. Oil major Exxon Mobil (NYSE:XOM), on the other hand, has said that it
will release its 2015 budget by early March. Exxon Mobil, however, had already
planned to reduce its capital expenditure even before the slump in oil prices
began, given the company's spending peaked in 2013. Chevron (NYSE:CVX), in
contrast, has said that it will slash its 2015 capital budget by 13%. Chevron's
spending, like Exxon, also peaked in 2013 but the company has accelerated the
pace of the decline in light of the soft crude pricing environment.
