Montage (MR) To Curb Capex Keeping Volume Guidance Intact
Zacks Investment Research | Mar 25, 2020 11:15PM ET
Montage Resources Corporation (NYSE:MR) recently announced a decline in capital expenditure for 2020 due to current market uncertainty. With commodity prices now in the bearish territory since the coronavirus pandemic is hurting global energy demand, the outlook for exploration and production business seems gloomy. Thus, upstream energy players like Montage Resources are restricting operational activities and thereby reducing capital budget.
The company revised its 2020 capital budget guidance to $145-$165 million, reflecting a 23% decline from the original guided range of $190-$210 million. Notably, 90% of the budget will likely be directed toward drilling and completions activities. The company’s 2019 capital spending was recorded at $366.2 million, of which $339.7 million was directed toward drilling and completion activities, $25.9 million was used for land-related costs, and the rest for corporate-related expenditures.
The Zacks Rank #1 (Strong Buy) company intends to focus on the stacked play region in the Ohio Marcellus and Utica Dry gas areas for developmental activities. It will likely drill 12-16 gross horizontal wells with the current budget plan. Notably, 65% of the budget will likely be used in the first half of the year. You can see Zacks Investment Research
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