Exxon spending has been slashed by $20 billion

ExxonMobil

Even America’s largest oil company can no longer ignore the drastic decrease in oil prices.

ExxonMobil has slashed its capital budget spending by $20 billion since its peak in 2013.

That’s a 46% decline and shows how oil companies are weathering the oil storm by ditching spending in an attempt to avoid further layoffs and other financial troubles.

“It’s a sign of the times. Lower prices and weakened cash flow is impacting all companies — even ExxonMobil,” said Brian Youngberg, senior analyst at Edward Jones.

Since 2015 the company has witnessed a 50% decrease in profits. The company has done better financially than many oil producers because it is more diversified.

Standard & Poor’s recently threatened to pull back on ExxonMobil’s perfect AAA credit rating.

The company on Wednesday said it will spend “only” $23 billion in 2016. That’s down by 25% from last year’s capital budget of $31 billion.

Exploration and production spending across the industry plunged by $250 billion in 2015 and is expected to drop by another $70 billion in 2016.

Exxon stock is down 22% since July 2014, although it has started to stabilize in recent weeks as oil prices have gained back some headway in recent weeks.

The company says it is being “selective” in where it spends and that it has the “financial flexibility to pursue attractive opportunities.”

Some analysts believe ExxonMobil will use its cash reserves to acquire distressed oil producers at below market prices.

The big question on the minds of many investors is whether or not ExxonMobile will decrease its dividend. The company has increased that payout for 33 straight years and many investors rely on that dividend as a reliable income stream.