ExxonMobil (XOM 0.57%) just became the latest oil company to slash its spending amid crashing crude prices. The energy giant on Tuesday announced it would be reducing its 2020 capital budget by 30% from $33 billion to $23 billion, and cutting operating expenses by 15%. These moves will help offset some of the impacts from the COVID-19 outbreak, which has cratered demand for oil and taken prices down with it. 

It was just over a month ago that ExxonMobil reaffirmed its spending plans for this year. During its March 5 investor day meeting, CEO Darren Woods said the company would "use the strength of our balance sheet to invest through the cycle." However, market conditions have significantly deteriorated since then, putting pressure on ExxonMobil's balance sheet, which led S&P Global to downgrade its credit rating.

An offshore oil platform the sun shining in the background.

Image source: Getty Images.

The bulk of the capital spending cuts will fall on its Permian Basin operations, where ExxonMobil can more quickly respond to changes in the market environment. The company will reduce the pace at which it drills and completes wells in that region until conditions improve.

ExxonMobil expects to continue developing its offshore resources in Guyana, where it is on track to start its project's second phase in 2022. However, it did warn of a potential delay of six to 12 months for the third phase because it is deferring some activity on that project. Meanwhile, it also anticipates delaying a final investment decision for its Rovuma LNG project in Mozambique.

Despite the spending cuts and activity reductions, ExxonMobil did maintain its long-term outlook. Further, the company says it plans to preserve its dividend. However, management stated that it would "continue evaluating the impacts of decreased demand on its 2020 production levels as well as longer-term production impacts" and make additional reductions to both spending and its outlook if necessary.