Anadarko Petroleum Corp. is cutting capital spending by one-third, dropping rigs and deferring well completions in response to low oil prices, CEO Al Walker said Tuesday.

“…[I]n the current market, we believe it is prudent to reduce capital investments and position the company for the future, rather than to pursue year-over-year growth,” Walker said. “As a result, we’ve reduced our initial 2015 capital expectations by approximately 33% relative to last year, with plans to reduce our short-cycle U.S. onshore rig activity by 40% and defer approximately 125 onshore well completions.”

Anadarko executives said the company is committed to assets such as the Wolfcamp Shale in the Delaware Basin of West Texas, where the Anadarko is applying its integrated midstream approach. As a result of the company’s delineation activities to date, Anadarko has established a net resource estimate of more than 1 billion boe with more than 5,000 identified drilling locations in the heart of the Wolfcamp oil play, the company said.

The company’s Wattenberg horizontal program generates “some of the strongest U.S. onshore returns in the industry,” executives said. The economics of the Wattenberg field continue to make it an attractive place to invest in 2015 as it generates better than 30% before-tax rates of return at current strip prices. Additionally, the company plans to allocate capital toward its Eagle Ford Shale activity which, at current strip prices, generates before-tax rates of return of more than 20%.

The company plans to allocate about 50% of its U.S. onshore capital budget of $3.8 billion to the Wattenberg and about 15% to the Eagle Ford while spending to delineate the Wolfcamp and develop infrastructure there. The remaining capital spending will be allocated to East Texas, as well as midstream development and exploration.

Chuck Meloy, executive vice president for U.S. onshore exploration and production said Anadarko expects to have an inventory of 420-440 drilled but not completed wells in the U.S. onshore at the end of 2015. “This inventory of drilled and not completed wells offers us an opportunity to flex our program commensurate with the service and commodity markets throughout the year,” he told analysts following the company.

The company reported fourth quarter and year-end results in early February (see Shale Daily, Feb. 3).