Sliding oil price necessitates more cuts and pain

In our initial spending forecast for 2016, we, at Evercore, reported that upstream North American spending was poised to decline 19% in 2016, after falling 34% in 2015, Table 1. However, in January, less than a month after the publication of the original forecast, deteriorating market conditions necessitated a sharp downward revision. Given continued market weakness, Evercore now expects initial 2016 budget reductions for the region of as much as 40-50%.

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